Gold price "alone market", Vietnamese investors increasingly indifferent

ANTD.VN - While the world gold price has been experiencing strong fluctuations, the domestic gold price has remained "alone" and has not moved much. The amount of gold consumed by Vietnamese people has also decreased sharply.

The gap between domestic and international gold prices narrows.

Recently, especially when the banking crisis in the US appeared with the collapse of a number of banks, the world gold price has fluctuated very strongly, with some sessions increasing up to around 50 USD/ounce.

In general, since the beginning of March, the world gold price has increased sharply by 200 USD/ounce, from the price range below 1,830 USD/ounce to around 2,030 USD/ounce. Converted to Vietnamese gold, the increase in the world market is up to nearly 6 million VND per tael.

Meanwhile, in the domestic market, SJC gold only increased by about 400,000 VND per tael in the same period, to 66.65 - 67.25 million VND per tael in the session on May 11.

This has reduced the domestic gold price difference to only around 9 million VND per tael compared to the difference of about 15 million VND per tael more than 2 months ago.

The sharp fluctuations in global gold prices have attracted investors. According to statistics from the World Gold Council (WGC), March saw a recovery in investment capital into gold ETFs after two months of strong net withdrawals. Net sales of gold ETFs in the quarter decreased to about 29 tons.

Global investment demand for gold bars and coins rose 5% year-on-year to 302 tonnes, despite significant volatility in major markets. Demand for gold bars and coins in the US reached 32 tonnes, the highest quarterly level since 2010, driven largely by fears of an economic slowdown and the need for safe havens during the banking crisis.

Vietnamese people's demand for gold has tended to decrease in recent months.

Meanwhile, demand for gold in Vietnam has dropped sharply. The WGC report shows that demand for gold in Vietnam was only 17.2 tons in the first quarter compared to 19.6 tons in the same period last year. Of which, demand for gold bars decreased by 10%, from 14 tons to 12.6 tons; demand for jewelry decreased by 18%, from 5.6 tons to 4.6 tons.

Mr. Shaokai Fan - CEO of Asia- Pacific region (excluding China) of WGC said that the decline in demand for gold jewelry in Vietnam is partly due to the impact of the base effect.

Accordingly, the first quarter of 2022 is the quarter with the strongest domestic demand for gold jewelry since 2007. Gold jewelry purchases in the first quarter of 2023 showed positive signs during the Lunar New Year, before gradually decreasing in February and March due to rising gold prices.

Be cautious in removing monopoly on gold market

One of the reasons why domestic gold prices are often "out of sync" with world gold prices is due to the monopoly regulations on SJC gold and the monopoly on importing raw gold stipulated in Decree 24 of the State Bank.

Since 2014, the State Bank has not released any more gold to the market, so SJC gold bars in circulation are limited, and are even converted into raw gold to serve the production of gold jewelry and fine arts. These types of gold jewelry and fine arts are also exported.

In the first months of 2022, domestic gold demand increased, forcing gold businesses to adjust gold prices higher to defend. Gold prices sometimes reached over 74 million VND/tael for SJC gold, the difference with world prices sometimes reached over 19 million VND/tael.

The narrowing of the gold price gap in the first months of this year may come from low gold demand.

Previously, many gold businesses had petitioned the State Bank to remove these regulations to increase gold supply and reduce the difference with world gold prices, but the management agency was still very cautious.

The State Bank said that in order to summarize and evaluate Decree 24, in the past time, this agency has organized 2 inspections (in May and July 2023) to rectify gold trading activities.

Along with that, the management agency also met with the Vietnam Gold Trading Association, credit institutions, and enterprises with gold bar trading activities to get opinions on the policy of managing gold trading activities. At the same time, it consulted 63 branches of the State Bank of Vietnam in provinces and cities on the assessment and summary of Decree 24.

On that basis, the State Bank has revised the draft assessment and summary report of Decree 24 and sent it to ministries, branches, and Gold Business Associations for comments in March 2023.

“In the coming time, the State Bank will synthesize the opinions of ministries, branches and the Gold Business Association and develop a report to the Prime Minister on the summary of Decree 24 in 2023” – the State Bank informed.

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