SJC wants to give up its monopoly on gold bars because it "does not benefit at all"

The above content was stated by SJC leaders at the regular press conference on Ho Chi Minh City's economy and society on the afternoon of May 16.

According to Ms. Hang, in 2012, SJC was chosen by the Government and the State Bank as the national gold bar brand, because they accounted for nearly 97% of transactions in the market. Also in this year, Decree 24 on gold trading activities was issued to control supply and prevent "goldenization" of the economy.

According to this decree, SJC is not allowed to import or stamp gold bars. All stamping molds are handed over to the State Bank for management. This company is only allowed to re-stamp dented gold.

"The gold bar monopoly does not benefit SJC, and the company is even accused of profiteering," she said, adding that even if the price difference is 15-20 million VND or more, the company will not benefit.

Ms. Hang further cited that before 2012 - when Decree 24 had not yet been issued - the company's equity was 400 billion VND, but its net profit was 300-400 billion VND per year. After 2012, the profit level dropped sharply, to a few tens of billions of VND.

"Profits have dropped sharply, and workers' lives are very difficult," said Ms. Hang.

Because they were not allowed to make gold bars, the company switched to making gold jewelry and made most of its profits from this segment. In the early stages, SJC's jewelry products faced difficulties, were not competitive, and only made a profit in the last 6 years.

According to the General Director of SJC, Decree 24 has had some success in helping to stabilize the economy and prevent "goldenization", but it has also created barriers. Enterprises are not allowed to import, produce, or stamp gold bars. "Before the decree was issued, there had never been such a situation of demand exceeding supply and gold price differences," said Ms. Hang, adding that Decree 24 needs to be amended to suit reality.

Specifically, the State needs to eliminate the monopoly on gold bars, create conditions for businesses to stamp gold bars, helping to diversify supply sources. People rely on the reputation and brand of businesses to choose to buy suitable products.

She also proposed allowing businesses to import gold to have raw materials. This would help avoid the current painful smuggling situation.

The proposal of SJC leaders was made in the context of the domestic gold price continuously fluctuating recently. At its peak, on May 10, the precious metal exceeded 92 million VND per tael - the highest level ever.

Domestic gold prices increased in the same direction as the world, but the difference was still high, fluctuating between 16-17 million VND, at times reaching up to 20 million VND per tael.

At the press conference, Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam, Ho Chi Minh City branch, said that gold price fluctuations are due to many factors such as geopolitical conflicts in countries and regions. Many central banks around the world are buying this precious metal.

Domestically, people consider gold as a financial investment channel, an asset to preserve capital amid market fluctuations. This puts pressure on domestic gold supply and demand.

To stabilize the market, the State Bank said it would increase supply to the market through bidding. After 7 bidding sessions held in the past month, of which 3 were canceled, over 27,000 taels of SJC gold bars were released to the market by the management agency.

Learning from previous "sluggish" auctions, the management agency has loosened the conditions on minimum and maximum bid sizes. This adjustment, according to the operator, has helped recent sessions increase the number of participants and the scale of gold supplied to the market.

However, Deputy Prime Minister Le Minh Khai earlier this week requested the State Bank to announce its decision to inspect the gold market and address the difference between domestic and international prices by May 17. He also requested to tighten the use of electronic invoices for each transaction and the situation of gold smuggling.

SJC General Director Le Thuy Hang agreed that the inspection and audit will help this market develop more healthily. Ms. Hang also suggested that the authorities should require all gold selling businesses to issue invoices, ensuring the origin and fairness in business.