Jeweller told to sell off gold reserves

The State Bank of Viet Nam has ordered the Sai Gon Jewellery Holding Co to sell some of its gold reserves in a bid to reduce inflated domestic gold prices down to international price levels.

“Although supply and demand for gold have not changed much on the domestic market, domestic gold prices are still higher than on the global market,” the central bank stated on its website.

SJC’s Ha Noi director Luu Quang Dien told Viet Nam News that his company was working out a plan to comply with the State Bank’s order.

“It won’t be easy,” Dien said. “We can barely manage to ensure sufficient supplies of gold for the market. And price is a big problem, especially since we are not compensated for losses like petrol or rice traders.” Dien also explained that gold was not like these other commodities. Its price changed by the hour and depended on import costs.

“SJC can lower its price a little,” Dien said. “We can afford not to profit but we can’t sell at a loss. All businesses need to balance their financials first.”

Yesterday, the price of gold dropped by VND1.16 million (US$62.72) per tael against Thursday’s price to around VND25.17 million ($1,360), marking the biggest drop in domestic gold prices since November. SJC Ha Noi listed retail prices at VND25.05-25.55 million per tael. The slide was driven by the announcement of the central bank’s order and a 5-per-cent decline in global prices to $1,048 an ounce.

As a consequence, gold trading became more active yesterday at Ha Noi gold shops

“Wow, I have been waiting for this decrease for months,” said Phan Thi Huyen, a customer at the Bao Tin Minh Chau shop on Tran Nhan Tong Street in Ha Noi.

In Ha Noi yesterday morning, Sacombank Jewellery Co listed buy/sell prices for gold bars at VND25.45 million/VND25.49 million. Phu Quy Co was trading gold bars at VND25 million/VND25.45 million, while Bao Tin Minh Chau Gold and Jewellry Co was offering its Dragon gold bars at VND25.3 million/VND25.55 million.

In HCM City, gold was being traded at VND25.1-25.35 million per tael.

VietNamNet/VNS

Tags: Sai Gon Jewellery Holding, Vietnam gold market, Vietnam gold prices