Customers buy and sell gold at a jewelry shop in Binh Thanh District, Ho Chi Minh City, August 7, 2020. Photo by VnExpress/Quynh Tran.
A supply shortage in Vietnam has widened the difference between domestic and global gold prices, according to experts, but authorities reject the claim.
Gold prices have been rising relentlessly this year as investors sought a safe haven amid the uncertainties caused by the Covid-19 pandemic. Vietnamese gold prices have always been higher than international rates, but in recent weeks the difference has been widening.
Prices of the popular SJC gold on Saturday morning was VND60.3 million ($2,594.87) per tael of 37.5 grams (1.2 ounces). This translated into a difference of $150, up from $40-100 last month.
Huynh Trung Khanh, senior consultant to the World Gold Council in Vietnam, Singapore and Indonesia, said the growing difference could be because there is a short supply and gold sellers have hiked prices.
The chairman of the Vietnam Gold Investment and Trading Corporation (VGC), Tran Thanh Hai, concurred with him saying local distributors like Saigon Jewelry Company (SJC) and DOJI are concerned about a shortage and have pushed their prices up.
DOJI reported a 30 percent surge in the number of customers in July and this month from a year ago. Bao Tin Minh Chau, another seller, said at times in recent weeks demand was several times higher than in the same period in past years.
But authorities dismiss this. Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City branch, said there is no short supply of gold bullion.
Gold companies are only pushing up prices to hedge the risks arising from the global volatility, he said.
Vietnam, with reserves of nearly $90 billion, could intervene in both the gold and foreign currency markets if necessary, he added.