SJC refuses to buy deformed gold bars

May 30th at 20:27

30-05-2012 20:27:19+07:00

Four days after the new regulation on trading gold bullion took effect, the domestic gold market has yet to stabilize as Saigon Jewelry Co, the country’s largest gold trader, now refuses to buy back deformed SJC gold bullion.

According to the owner of a gold shop in Ho Chi Minh City’s District 8, after receiving some distorted SJC gold bars from customers, he phoned SJC to ask about returning the products, and was told that the company was “temporarily closed for three days to wait for more information from the State Bank of Vietnam,” he said.

The man said earlier it was easy to exchange the deformed gold bullion, as customers had to pay a fee of VND60,000 to reshape the bars.

Other gold shops said this refusal has troubled them with huge stocks of gold, the prices of which have constantly fluctuated.

A gold shop in District 1 said all shops now carefully examine gold bullion before buying it.

“If the bullion has any flaws or spots, it can only be purchased at the price of raw gold,” the shop owner said.

Meanwhile, Nguyen Cong Tuong, SJC deputy head of sales, confirmed that the company has stopped exchanging deformed SJC gold bullion as of May 25 because the central bank has restricted its gold bullion processing following a new management regulation.

“SJC has submitted documents to the central bank to ask for permission to reshape the deformed bars, but has yet to receive any response,” said Tuong.

Gold in Vietnam lost VND300,000 a tael this morning, after fluctuating inconsiderably in previous sessions, following a sharp fall of global prices.

SJC gold bullion was quoted at VND40.91 million a tael this morning, and sold at VND41.21 million a tael. PNJ gold bars from the Phu Nhuan Jewelry Co were bought at VND40.93 million, and sold at VND41.18 million a tael.

Gold for June delivery on Comex dropped by $20.2 to $1,548.7 an ounce over concern about Spanish debt.

On the Asian market, the precious metal settled at $1,547.9 an ounce this morning, down by $6.9 an ounce from yesterday’s closing.

Under this price, gold in Vietnam is currently VND1.7 million a tael higher than its global counterpart.

(1tael = 37.5 grams; VND1 million = $48)