Thailand
Why is Vietnam’s gold price much higher than the global price?
The gap in gold prices between Vietnam and the world has reached VND18 million per tael. Experts say it’s still unclear how to solve the problem.
Closing the last trading session last week, SJC bullion gold prices in Hanoi climbed to VND68.75 million per tael (buying) and VND69.65 million (selling), while the prices were VND68.75 million and VND69.67 million, respectively, in HCM City.
Doji Hanoi quoted the buying price of VND68.7 million and selling price of VND69.55 million per tael. Meanwhile, it quoted the prices of VND68.7 million and VND69.6 million, respectively, in HCM City.
In the world market, the gold price in the US (spot delivery) increased by $23.8 per ounce to $1,872.2 per ounce. The futures prices with delivery in June 2022 increased by $22.7 to $1,875.5 per ounce on Comex New York.
As such, the gap between the world and Vietnam gold prices was VND16.47 million per tael.
There are two major gold products in the Vietnamese market, including SJC gold, the exclusive brand name of the State Bank of Vietnam (SBV), and physical gold in the form of gold jewelry and blistered gold produced by goldsmith companies.
At present, SJC gold is about VND15 million per tael more expensive than the world market when converting in accordance with the dong/dollar exchange rate, not including taxes and fees. However, the gap sometimes soars to VND20 million per tael.
The latest report of the World Gold Council showed that total gold demand in Vietnam in 2021 grew by 8% and jewelry gold by 11 percent. The high demand and supply shortage explained why the gold price has soared.
The director of a business said the State Bank of Vietnam (SBV) doesn’t allow importing of material gold, and the price gap depends on market supply and demand. As a result, people have to buy gold bullion at very high prices.
According to the SBV Governor Nguyen Thi Hong, the developments of the gold price in the world market are very complicated. Gold prices are influenced by many factors, including the dollar index, Ukraine-Russia conflict and a series of trade and political factors.
SBV has found that the domestic gold price has been coming in line with the world price. However, the domestic price goes up more rapidly than the world’s price, and goes down more slowly.
The second reason is that bullion gold traders quote high prices to cover risks as they see the gold prices escalating.
Duy Anh
Source: https://vietnamnet.vn/en/why-is-vietnam-s-gold-price-much-higher-than-the-global-price-2029822.html