Since SJC became the single national gold brand, people have flocked to buy more gold as prices continued to skyrocket.
People flock to stores to buy SJC gold
Unsual gold market
According to a director of a gold company, domestic gold prices were often set in accordance with world prices at the start of the day. However, from yesterday, the domestic prices have been set higher than the world prices.
In the past, he has said that domestic prices only see large increases when world prices go up sharply, however now, when world prices rise by just a few USD, domestic prices often see a disproportionate spike and trail behind world prices for any decrease.
Nguyen Cong Tuong, Deputy Sales Manger of SJC, said very few people are selling gold at this time despite the high price at around VND48 million per tael (USD2,296), and in fact demand remains high.
High prices caused by monopoly
Dr. Nguyen Dai Lai, officer of the State Bank of Vietnam said that gold prices in Vietnam are largely determined by brand.
When banks turned to gold to boost liquidity before the ban on November 25, they chose SJC, the national brand, and this has caused some unease among the citizens. People started to sell other brands of gold for fear taking losses. This pushed the SJC gold prices up.
Gold prices with other brands such as AAA or Bao Tin Minh Chau is consistently around VND3.5 million less per tael than SJC.
When the State Bank of Vietnam gave the go-ahead for many jewelry companies to convert their gold bullion to its national SJC brand, those companies which did so gained huge profits.
Taking in the gap between domestic and global gold price, which has widened from VND2.5-2.6 million per tael to VND3.1 million per tael, many people said SJC monopoly has caused the problem. However, Nguyen Thanh Long, Chairman of the Gold Business Association, said that gold is at such a high price because of uncertainty caused by new regulations.
