What's happening in the gold market?

For the first time in the gold market, the price of gold rings is higher than that of national brand SJC gold bars. This seems to contain an abnormality. But the most surprising thing is that when the price of SJC gold stands still, the whole market seems to “freeze”.

Gold market motionless

On July 14, the price of plain round gold rings was at 75.9 - 77.1 million VND/tael for buying and selling, price SJC gold bars at 74.9 - 76.9 million VND/tael for buying and selling. The price of gold rings has been continuously adjusted to closely follow the world gold price, while SJC gold bars have been unchanged for a month. This is also the first time that the price of gold rings is higher than that of gold bars. For a long time, SJC gold bars, a national brand, have been popular with the people and are quite scarce, so at times the price is 10 million VND/tael higher than gold rings, and 20 million VND/tael higher than the world gold price.

However, after the intervention of Bank The State, the price of SJC gold bars has decreased sharply and has been continuously stable over time, not fluctuating with the world price. In principle, the price of gold bars is higher than the price of gold rings, and is more popular than the price of gold rings, because gold bars have more advantages such as: Carrying a national brand, more prestigious, not easy to counterfeit or imitate.

Gold rings have many different brands, and are easier to counterfeit than gold bars. Gold rings only have the advantage of being able to be made into many types with small weights (from one to several taels), affordable for many people, while gold bar Currently there is only 1 tael type, only rich people can buy it.

The price of gold rings closely follows the world gold price and is higher than the price of SJC gold bars. Photo: Nhu Y

Talking with PV Tien Phong, expert Nguyen Quang Huy, Faculty of Finance - Banking, School Nguyen Trai University analysis, gold ring price remains high due to international influence. In the world market in the past few days, gold price has been trading at 2,410 USD/ounce, down slightly from the previous session but still the peak of this year. In May 2024, world gold price increased to the highest level, nearly 2,450 USD/ounce.

According to experts, to stabilize the gold market, it is necessary to quickly amend Decree 24 on the management of gold trading activities. Accordingly, the State Bank can remove the monopoly of the SJC gold bar brand. If the State Bank wants to maintain the monopoly of the SJC gold bar brand (because the SJC gold bar brand has occupied 90% of the market, if there are many different gold bar brands, people may still prefer SJC gold bars), it is necessary to supply and fully meet the market's demand.

According to Mr. Huy, after the State Bank intervened to maintain stability, gold price SJC gold bars are almost unchanged and only about 3 million VND/tael higher than the world gold price. However, many reports show that the supply of SJC gold bars to the market is still low, making it difficult for buyers to access. Accordingly, people have turned to buying gold rings. However, they also find it difficult to buy gold rings at some large gold businesses at this time. At some stores, people who want to buy gold rings have to wait 10-15 days to receive gold.

“Gold rings will increase in price and be higher than SJC gold bars only in the short term. If this continues, the State Bank will need to regulate with flexible tools,” said Mr. Huy. According to Mr. Huy, basically, domestic gold bars and gold rings will follow the increase and decrease of world gold prices and the State Bank’s supply and demand regulation policy. Regarding the amendment of Decree 24… or the FED preparing to lower interest rates, the increasingly fierce Russia-Ukraine war… these will be factors that will cause gold prices to increase and possibly continue to maintain at the peak level reached in the past time.

Strengthening tax control and gold purchase and sale invoices

Regarding tightening the management of gold transactions, statistics from the General Department of Taxation show that currently, the country has 12,500 businesses, individuals and more than 5,500 households buying, selling, manufacturing and processing gold, silver and precious stones. In order to contribute to preventing distortions in the gold market, tax authorities have implemented many solutions such as controlling electronic invoices for gold trading activities.

From July 1, 2022, e-invoices have been deployed nationwide for businesses and business households. 100% of businesses operating in the gold and silver business sector have used e-invoices. To date, more than 5,830 gold and silver businesses nationwide have applied and used over 1.06 million e-invoices.

However, in the field of gold and silver processing, in some cases the buyers are individuals and do not receive invoices, leading to difficulties for tax authorities in controlling transactions.

Mr. Dang Ngoc Minh, Deputy Director General of the General Department of Taxation, said that the tax authority coordinated with the State Bank to inspect the gold market. Currently, the country has 38 enterprises and organizations licensed to trade in SJC gold. "The tax authority sent officers to join the inspection team, exploit tax payment data, and apply electronic invoices of 16 SJC gold trading units. Currently, the competent authority is in the process of inspection and will announce the results according to regulations," said Mr. Minh.

A survey by Tien Phong reporters at gold shops in Hanoi such as Doji and Phu Quy shows that when buying plain round gold rings, customers must present their citizen identification cards. At shops that pay in advance, customers receive an appointment from 10 days to 1 month to receive the gold. After receiving the gold, the shop issues an electronic invoice to the customer. Currently, in addition to meeting business conditions, gold trading enterprises are subject to 2 types of taxes: Value Added Tax (VAT) and corporate income tax. As a special type of goods, VAT on gold is calculated according to the direct tax calculation method.

In particular, the added value of the activities of buying and selling gold, silver and precious stones is determined by the selling price minus the buying price. In other words, VAT on gold is applied to the difference between the buying and selling price of gold.

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