‘Thirsty’ for raw gold, businesses spend big to buy from SJC

Cost of buying raw gold increased by 7 – 10%

Start the story with Adolescent Regarding the recent gold trading activities, Ms. Bui Hong Tam, General Director of Ancarat Vietnam Joint Stock Company, exclaimed: “Very boring. This year, the economy is difficult so the trading situation is not optimistic. Recently, the world gold price increased, domestic gold also increased, so there were buyers, but when the gold price decreased, there were very few buyers.”

The issue that makes Ms. Tam quite worried and concerned is the source of raw gold. Until now, raw gold has been mainly purchased by businesses from the people, but now the regulations are tighter, buying gold must ensure full documentation. Besides, the source of gold from the people to sell at this time is not abundant.

“In need of raw materials for production, businesses have to switch to buying raw gold from SJC Company at a price about 7-10% more expensive than buying raw gold from the people. Focusing on producing jewelry gold, the type of gold Ancarat buys from SJC Company is mainly 99% jewelry gold or 95% jewelry gold. When buying, businesses mix it into 18k gold or 2-number-9 gold.

Ancarat has to prepare goods in stock, especially to prepare goods for the upcoming Tet holiday, so it has to increase its raw material purchases. Buying raw gold from SJC Company is simpler and more proactive. However, due to the increased cost of buying raw gold, the product price has also increased,” said Ms. Tam.

Talk to Adolescentgold expert Tran Duy Phuong emphasized that recently, the State Bank has only solved the problem of SJC gold bars, but has not solved the problem of raw gold for businesses that need to produce gold rings and jewelry.

“Currently, businesses want to produce gold rings and jewelry but do not have raw materials. Businesses are having to solve the problem of output and input; buying raw materials with invoices and documents to produce gold products to serve people’s needs.

However, buying raw gold with invoices and documents is quite difficult. This leads to a small amount of raw gold with documents, so the amount sold is also small,” said Mr. Phuong.

Allow import of raw gold but with control

Ms. Tram expressed: “Gold trading enterprises like us really hope to be more proactive in the issue of raw gold. There may be a mechanism for enterprises to import themselves or for the State Bank to import and allow enterprises to bid to buy back. However, the key is that the price offered must be close to the world gold price.”

To solve the problem of raw gold, according to Mr. Phuong, the State Bank should allow businesses to import raw gold to produce gold rings and jewelry.

“For more than ten years, we have not imported gold. Now, businesses can be allowed to import within a quota. The State Bank can issue quotas to businesses or the State Bank can import gold to resell to businesses in need.

Enterprises submit plans on how much gold they need, and the State Bank will use that as a basis to sell raw gold to enterprises,” Mr. Phuong shared his opinion.

Many times exchanged with AdolescentVice President of the Vietnam Gold Business Association Huynh Trung Khanh expressed concerns about the story of removing the monopoly on SJC gold bars as well as allowing businesses to import raw gold.

“The State Bank still controls the market, not opening it wide. Gold bar production is controlled by production quotas, and raw material imports are also controlled by import quotas, not allowing freedom to import as much as one wants. When controlled like that, issues related to exchange rates and foreign exchange are also controlled.

The Vietnam Gold Business Association has also proposed that, initially, 3 businesses (PNJ, SJC, DOJI) be allowed to import 1.5 tons of gold/year, equivalent to each business importing 500 kg of gold/year. Businesses also only request to import within a controlled scope,” the Vice President of the Vietnam Gold Business Association informed.