Paradox in public demand for gold and limited availability of gold evident

At present, the domestic gold price, particularly for SJC gold bars, has reduced the disparity with the global gold price.

Buying and selling SJC gold bars became extremely difficult after the State Bank of Vietnam (SBV) sold gold to SJC Company and four commercial banks including State-owned commercial banks Agribank, Vietinbank, Vietcombank, BIDV. The SBV required SJC Company and four commercial banks not to sell at a price higher than VND1 million per tael compared to the selling price announced by the SBV.

It is worth mentioning that among these, only SJC Company is allowed to sell and buy back gold bars, while 4 commercial banks can only sell.

Resident Anh Ngoc in Thu Duc City moaned that it is very difficult to buy gold when the precious metal is sold little by little. She revealed that she doesn’t buy gold for speculation but just want to divide her assets into many baskets. When the savings interest rate dropped sharply, she withdrew money to buy gold, but in the past 4 months she could only buy three taels of SJC gold.

Ms. Ngoc said that in early June this year, when the sale of SJC gold bars was stabilized at 5 gold selling units, she visited SJC Company to purchase 20 taels of SJC gold. After queuing for nearly 3 hours, she was only able to buy 2 taels at the price of VND69.8 million a tael. The staff informed her that there was insufficient gold available and scheduled an appointment for the following day. Later, when gold was sold online, she was secretly pleased as she no longer needed to take time off work to buy.

However, despite registering to buy gold on the websites and apps of banks and SJC Company numerous times, she consistently received notifications that the day's gold sales were sold out, even just a few minutes after opening. She even requested her younger brother, who works at a securities company specializing in placing stock orders for customers, to monitor daily sales of the precious metal by setting up a robot to place orders but she still couldn't secure a chance to buy gold.

Not only that, Ms. Ngoc added that after successfully registering, customers will receive a code confirming the time and location of the transaction to receive the gold, but must not be more than 30 minutes late. There, customers must take a number, wait their turn and declare information: occupation, average income in the last 6 months, source of money to buy gold to receive the gold.

She said that the regulations for buying gold online sound simple but in reality are too complicated remembering when she was 30 minutes late once so she did not receive the gold because the transaction was canceled.

A recent survey conducted in Ho Chi Minh City indicates that the trade of branded gold presents significant challenges. An employee at the Doji gold store located on Cach Mang Thang Tam Street in District 3 reported a shortage of gold rings available for sale, attributing this to the high demand for gold.

Similarly, the manager of a PNJ store in District 3 stated that the company is currently prioritizing the production of gold jewelry, as the importation of gold is prohibited, resulting in an insufficient supply of raw materials for gold rings. Consequently, gold rings are only available through resale. The store does not accept pre-orders due to uncertainty regarding the timing of future stock availability. However, a variety of gold jewelry and wedding gold collections remain in stock.

At the Mi Hong gold shop located in the Binh Thanh district, customers are busy with buying and selling transactions; however, they face restrictions on their purchases that each person can buy 2 to 5 taels of SJC gold and under 5 taels of gold rings, varying by day. SJC Company also imposes a limit  of 5 taels for both SJC gold bars and gold rings per person per day, but the company can’t make sure of the availability of bullion.

The challenges extend beyond purchasing, as selling gold, particularly SJC gold bars, has become increasingly difficult. Previously, the issue was primarily associated with gold rings, but now the selling of SJC gold has encountered similar obstacles. Currently, SJC Company remains the sole entity willing to repurchase all types of SJC gold, even in the absence of invoices or proof of purchase from other vendors.

A representative of PNJ stores have stated that the company do not accept gold rings from other brands and will only repurchase SJC gold bars that were originally sold by PNJ. In instances where a seller has purchased SJC gold from PNJ but has misplaced the documentation, the company will verify the previous purchase details, and if confirmed, will proceed with the buyback. The manager of a PNJ store admitted that if SJC golds are not sold by PNJ, even with a receipt from another source, PNJ will not accept it due to the complexities involved in verifying the gold.

Similarly, Doji gold trading centers only purchase SJC gold bars with 2 characters (a series produced by SJC after 1996) in new, undamaged blister packs. They do not buy other branded gold rings. Mi Hong gold shop also only purchases SJC gold with accompanying papers, invoices, or gold sold by the gold shop. Meanwhile, gold shops around An Dong market in District 5 all refuse to buy back SJC gold bars, as regulations prohibit gold shops from buying and selling this type of gold bar.

A proprietor of a gold shop said that in previous times, transactions were conducted in an "underground" manner; however, due to stringent regulations, the shop can no longer repurchase SJC gold and other gold varieties without proper receipts. Confronted with the challenges of selling officially recognized gold, individuals are compelled to acquire "underground" gold when necessary, incurring a price differential of VND1 million to VND1.5 million per tael compared to the official gold selling framework.

However, a representative of a State-owned commercial bank in Ho Chi Minh City said that people who buy and sell illegally will face risks of buying fake gold and gold of unknown origin. Because SJC gold bars are all managed by serial numbers, like an identification code attached to that gold bar. Banks that currently sell gold must store citizen identification numbers and issue electronic invoices. That invoice will have the serial number of the gold bar and be stored in the system. That means, later when tracing the origin, it will be determined where the gold was sold from and to whom. Therefore, people who buy gold floating outside need to consider, if later they have to prove the origin of the gold.