The continuing big gap between the domestic and international gold prices and the chaos on the domestic market have both made the tasks of stabilising the market and mobilising gold capital from the public unfeasible.
Enterprises put pressure on State Bank?
Half a month after the new Decree No. 24 on the gold market management took effect, there still exists a big gap of 2 million dong per tael between the domestic and international prices. Meanwhile, the market has become chaotic as the State announces that it would hold the monopoly in making bullion gold, and people heard that SJC would be the national gold brand.
Currently, non-SJC gold bars, or deformed SJC gold bars have been refused, because people fear that non-SJC gold would not be allowed to be traded in the future. As a result, non-SJC gold prices have dropped dramatically, thus causing heavy losses to non-SJC gold keepers.
Nguyen Thanh Truc, general director of Agribank’s Jewellery Company, said it’s unfair that non-SJC gold prices are lower than the gold bars with SJC brand. He stressed that it’s necessary for the State Bank to settle the problem urgently by setting up detailed regulation about how to convert non-SJC into SJC gold.
High ranking officials of the State Bank of Vietnam all have affirmed on mass media that non-SJC gold still can be traded as usual. However, the decree on the gold market management and the circular guiding the implementation of the decree both do not mention the regulations.
A manager of another gold company also complained that since the Decree 24 came out, the bullion gold price of the company has always been traded at the prices much lower than that of SJC gold.
Meanwhile, analysts have noted that not only SJC pay low for non-SJC gold, but other goldsmith companies also refuse to buy non-SJC gold or force the prices down for non-SJC gold bars. By doing this, according to analysts, gold companies are trying to put pressure on the State Bank, urging the central bank to allow to convert non-SJC gold into SJC gold.
Right in late 2011, goldsmith companies asked for the conversion into SJC gold, right after the State Bank informed that it would hold the monopoly in making bullion gold.
It’ll take time
Regarding the news that SJC refused to buy deformed gold bars made by the company itself, Nguyen Cong Tuong, deputy Head of the Business Division of SJC, said the company has asked for the permission from the State Bank to buy the gold bars.
It is expected that the State Bank would promulgate a legal document which legalises the trade of distorted SJC gold bars. However, the roadmap on converting non-SJC into SJC gold would not be clear.
Experts say that the State Bank has its reasons to keep cautious with the conversion. Besides SJC, the State Bank still cannot control other goldsmith companies. Therefore, if it allows converting gold now, it would lend a hand to legalise illegal gold imports. This, once again, shows that the watchdog agency has got puzzled with the gold market management.
It is expected that the plan on mobilising gold from the public would be compiled in 2012. However, there has been no news about the compilation process. Meanwhile, a high ranking official of the State Bank said since this is a very sensitive issue which may hurt different groups of interests, he is not sure if the compilation can be completed this year.