Bullion restriction takes effect; rings in high demand
Bullion restriction takes effect; rings in high demand
Gold buyers and sellers are turning to gold rings as safe haven as the door has partially closed to gold bullion trading activities with a new regulation taking effect on Thursday.
More and more people prefer gold rings as the price of domestic gold bullion was too high compared to the world price, plus the fact the network of buying and selling gold bars will shrink in accordance with the central bank’s regulation taking effect today that restricts gold bullion trading.
Some 2,500 newly licensed gold-bullion trading facilities are set to replace tens of thousands of unqualified businesses countrywide starting Thursday.
They are the branches of 22 local banks and 16 businesses meeting all of the conditions of the State Bank of Vietnam to trade in the precious metal. The remaining below-par facilities are required by SBV to stop their gold trading business.
The number of gold trading facilities in Ho Chi Minh City will thus drop from more than 3,000 to only 900.
The selling price of gold bullion produced by Saigon Jewelry Co (SJC), the gold bullion monopoly, was at VND46.43 million a tael as of Wednesday evening, still VND4.63 million more expensive than its world counterpart.
But the price gap between SJC gold bullion and that of other refiners, like AAA of Agribank, widened to some VND5 million a tael, both for bid and ask.
A gold shop on Tung Thien Vuong Street in Ho Chi Minh City’s District 8, told Tuoi Tre that gold ring trading has become its main activities these days with some tens of taels traded daily. People choose to buy gold rings because they can be bought and sold easily.
The current prices of gold rings at such stores are equivalent to world prices, but the purity stands at 99 percent rather than 99.99 percent as the gold bullion. It brings a VND460,000 profit to those shops for each tael of gold rings sold.
Nguyen Ngoc Trong, director of HCMC-based Phu Nhuan Jewelry Co, said its average daily sales of gold rings with 99.99 percent purity has surged from a negligible amount in the past to some ten taels recently.
Another reason they are popular is that rings of 99.99 percent purity gold are around VND2 million a tael cheaper than SJC bullion.
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