Hanoi, Vietnam. Stock image.
Along Hanoi’s busiest gold trading street, dozens of storefronts gleam with bullion bars and jewelry. On Friday, however, shopkeepers sat idly behind glass counters, waiting for customers as Vietnam ended its decades-long monopoly on bullion trade and production, the first major liberalization of the market in more than a decade.
The shoppers may be slow to come but early signs of the monopoly’s end were evident.
Gold prices in the local market dropped, with SJC-branded gold, the country’s most recognized name, down about 500,000 dong per tael to 140.2 million dong ($5,320). Several other brands also cut their prices by as much as 600,000 dong per tael, the traditional Chinese unit of weight and currency used for precious metals.
“The drop followed moves in global markets, where gold prices declined amid profit-taking by investors,” Le Thi Hoa, a gold shop owner in downtown Hanoi, said. “The new rule and the recent price decline could encourage people to trade more now.”
The policy shift, effective Oct. 10, opens the gold market in Vietnam to banks and companies that meet the regulator’s requirements. It’s expected to boost supply and narrow the gap between domestic and international prices, according to Nguyen Quoc Hung, general secretary of Vietnam Banks Association. Before the policy change, the central bank was the sole importer of gold bullion and Saigon Jewelry Co., or SJC, the only legal producer of gold bars.
“People are still comparing prices and brands,” Tran Hong Lien, another gold shopkeeper next to Hoa’s, said, glancing at a near-empty counter. “Now that SJC isn’t the only choice, buyers want to see where they can get better value,” she said.
The new regulation also requires that any transaction of more than 20 million dong be conducted via bank transfer, ending the long tradition of cash-for-gold dealings. That’s proved a small nuisance for elderly buyers, who now are having to call their children to handle the payments online.
“It’s a bit funny to see an 75-year-old whispering bank details over the phone just to buy a bracelet,” Hoa said with a smile. “But it will work well.”
(By Nguyen Dieu Tu Uyen)