Gold price plummets, people get puzzled, bankers hit the jackpot

Mar 4th at 15:11

04-03-2013 15:11:21+07:00

Experts say some bankers have “swept the board” thanks to a new policy laid down by the State Bank of Vietnam.

The State Bank of Vietnam stated that it begins organizing gold tenders from March 1, 2013. Prior to that, the domestic gold price had dropped significantly to the VND42 million per tael threshold. A lot of banks, which got the permission to import gold temporarily for re-export later, have earned big money.

An expert estimates that the profit the banks could pocket may be up to VND1.2 trillion. Explaining this, he said the exported gold was non-SJC gold (SJC is now the Vietnamese national gold brand).

After that, the bankers imported material gold and have the imports processed at the Saigon Jewelry Company (SJC). While the banks just have to pay VND50,000 per tael in fee, they can sell the gold later to enjoy the price gap of VND1.5-2 million per tael.

Meanwhile, according to the State bank, 10 commercial banks still have not completed and finalization and closing of gold accounts yet due to the liquidity problem.

The profuse gold supply plus the domestic price decreases have both brought the gold opportunities for banks to buy gold in so as to finalize and close the gold accounts before the deadline of June 30.

A banker said at a conference of the banking system recently that credit institutions have reported the sharp fall of 96 percent in the business efficiency in comparison with the last year.

This has been explained by the fact that some banks have taken loss from the gold mobilization and lending. The Q4 finance report of ACB showed that the bank incurred the loss of VND1,863 billion in 2012 from the gold and foreign currency trading activities.

Prior to that, some banks also complained about the loss from gold trading in 2012. The banks took big losses because they bought gold at high prices to ensure their liquidity (at the time when the market vibrated on the arrest of Nguyen Duc Kien, a big banker, the gold price hit the VND47 million per tael threshold). Meanwhile, the gold price has later decreased sharply.

Some make fat profits, others take big losses

The State Bank of Vietnam has vowed to narrow the gap between the domestic and the international gold prices.

Sources have said that in order to obtain that goal, the State Bank of Vietnam would take some measures to help increase the supply.

The information has had immediate impacts on the gold market. Since people believe that the State Bank would put more gold into the market to improve the supply, the gold prices have been decreasing rapidly, thus making gold holders suffer.

Hung Thang, a gold investor in Le Chan district in Hai Phong complained on February 28 that he has lost VND2 billion.

“I wonder if I should sell gold now or keep gold. I am afraid that the prices would go down further because the State Bank is determined to force the prices down. Meanwhile, if I sell gold now, I would incur the loss of VND2 billion,” Thang said.

The investor revealed that on pre-Tet days, he sometimes could earn up to tens of millions of dong in profit from trading gold. At that time, the gold price fluctuated heavily, which brought many opportunities to investors to make money.

Anh in district 3, HCM City, also complained that she has lost VND4 million for every tael of gold she has, because the domestic gold price has been decreasing continuously in recent days.