Gold bid-ask spread narrowed to 0.1% on fierce competition: gold trader
The fierce competition in gold market forced gold shops to narrow trading band to 0.1-0.2% from 1-3% of revenue, representing current bid-ask spread of only VND 80,000 – VND100,000/tael compared to previous VND400,000/tael.
The fierce competition in gold market forced gold shops to narrow trading band to 0.1-0.2% from 1-3% of revenue, representing current bid-ask spread of only VND 80,000 – VND100,000/tael compared to previous VND400,000/tael, Vu Minh Chau, General Director of Bao Tin Minh Chau company was quoted as saying by the online newspaper Dan Tri.
This bid-ask spread is unprecedented in the gold industry, helping gold trading companies to lure customers which caused turbulences in the gold market and likely hurt small gold shops , Chau said.
Tran Binh Minh, Dai Long Finance Company’s CEO said: “Previously, few gold traders participate in the gold market, but nowadays many medium and big-sized private companies, financial groups, gold shops were involved in.”
They have strong financial capacity and are willing to spend a lot of money to hoard gold and seize opportunities to take profit at low prices when gold eases, resulting in narrower trading band. In the long run, it will hurt small companies if nothing changes, Minh added
Meanwhile, “trading at Bao Tin Minh Chau as well as at many other gold companies has been very sluggish as they spent a lot on purchasing gold but earn a gross profit of only VND6,000-VND7,000/tael”, Chau shared.
The lackluster trading may attribute to the floated gold market, some gold traders pointed out, specifying that the central bank set limit on lending interest rates, deposit interest rates and stock price changes but no regulation for bid-ask spread.
Minh suggested two ways of navigating gold market including: letting it float freely, and setting up a gold trading center where all transactions are transparent.
[1:34:19 PM] Huệ Lê: Gold Bid-Ask Spread Narrowed to 0.1% on Fierce Competition: Gold Trader
The fierce competition in gold market forced gold shops to narrow trading band to 0.1-0.2% from 1-3% of revenue, representing current bid-ask spread of only VND 80,000 – VND100,000/tael compared to previous VND400,000/tael, Vu Minh Chau, General Director of Bao Tin Minh Chau company was quoted as saying by the online newspaper Dan Tri.
This bid-ask spread is unprecedented in the gold industry, helping gold trading companies to lure customers which caused turbulences in the gold market and likely hurt small gold shops , Chau said.
Tran Binh Minh, Dai Long Finance Company’s CEO said: “Previously, few gold traders participate in the gold market, but nowadays many medium and big-sized private companies, financial groups, gold shops were involved in.”
They have strong financial capacity and are willing to spend a lot of money to hoard gold and seize opportunities to take profit at low prices when gold eases, resulting in narrower trading band. In the long run, it will hurt small companies if nothing changes, Minh added
Meanwhile, “trading at Bao Tin Minh Chau as well as at many other gold companies has been very sluggish as they spent a lot on purchasing gold but earn a gross profit of only VND6,000-VND7,000/tael”, Chau shared.
The lackluster trading may attribute to the floated gold market, some gold traders pointed out, specifying that the central bank set limit on lending interest rates, deposit interest rates and stock price changes but no regulation for bid-ask spread.
Minh suggested two ways of navigating gold market including: letting it float freely, and setting up a gold trading center where all transactions are transparent. – Stoxplus.com
Tags: vietnam gold, Vietnam gold market, Vietnam gold prices