Some golden market alternatives
Some golden market alternatives
Industry players are vocalising ways to control the local bullion market.
Half month after Decree 24/2012/ND-CP on gold business management came into force, the gap in domestic and world market gold prices remains vast at approximately VND2 million ($95) per tael (1.2 ounces).
Not only that, with the regulation the State Bank (SBV) holds a monopoly in gold bar trading deformed and non-SJC gold bars were driven into a critical state with prices being set much lower than that of genuine SJC gold bars (about VND1-2 million per tael lower), causing losses to holders.
That was because in late 2011, the SBV voiced its intention to turn SJC, which is the most popular gold bar brand in Vietnam holding more than 90 per cent market share, into a national unique gold bar brand.
Agribank’s jewelry company director Nguyen Thanh Truc said it was unfair when non-SJC gold bars caused losses to people.
“The price of SJC and other gold bar brands should be pulled closer. The SBV needs to give birth to clearer regulations on changing non-SJC into SJC gold bars, an issue not yet addressed in Decree 24 and its guiding circular,” Truc said.
The leader of a Hanoi jewelry firm said the price of gold bars made by the firm were often lower than that of SJC gold bars after Decree 24 came into force.
“The central bank should soon present regulations on processing and shifting non-SJC into SJC gold bars since these non-SJC gold bars production also get SBV licences and have a similar quality,” said the executive.
Whether non-SJC gold bars will be liable to convert into SJC gold bars remains unknown.
According to gold experts, since many jewel companies were currently out of reach from the SBV, prudence was needed to avoid bringing legitimacy to illegal gold.
A member of the National Financial and Monetary Policy Council Dr. Cao Si Kiem assumed a big gap in domestic and world market gold price after Decree 24 came into force reflected the gold market was driven by speculative factors. Hence, to resume order central bank needed to come up with tougher measures while not giving priority to any business.
“Besides, the SBV needs a huge gold reserves beforehand to interfere the market when necessary. Mobilising idle gold from the community is a smart option,” said Kiem.
Earlier, the SBV said the plan on mobilising gold from the community would come out in 2012. “The plan is in the making. This is a complex and sensitive issue, so that I am not sure whether it could be completed within this year or not,” said a SBV executive
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