HCMC — A significant gold shortage at jewelry stores is prompting retail investors to turn to social media platforms for buying and selling the precious metal. This shift has raised alarms about the potential emergence of a black market as prices surge.
Rising Demand Amid Shortages
The recent scarcity of gold has led to increased trading activity on platforms like Facebook. For instance, a seller known as Thu from Ho Chi Minh City recently listed five taels of gold rings for VND88 million (approximately US$3,465.25) each. This price reflects a 1.14% premium over what she could have received at the Saigon Jewelry Company.
Numerous groups dedicated to gold trading on social media have gained substantial traction, with some boasting over 65,000 members and a flurry of posts each day. Most sellers in these groups are asking prices VND1-3 million higher than the prevailing market rate, indicating a significant markup driven by demand.
Market Trends and Price Fluctuations
Gold bullion prices are currently around VND89 million per tael (37.5 grams or 1.2 ounces), marking a 16% increase since the start of the year. This upward trend in prices has exacerbated the existing shortages, leading to widespread complaints among consumers struggling to purchase gold from established sellers, including four state-owned banks: Agribank, VietinBank, Vietcombank, and BIDV.
These institutions frequently cite a lack of stock and often impose restrictions on purchases, limiting buyers to one or two taels each. Customers have also encountered difficulties when attempting to buy gold online due to overwhelming demand.
Experts Warn of Black Market Growth
Huynh Trung Khanh, the deputy chairman of the Vietnam Gold Traders Association, attributed the rise in social media transactions to the ongoing supply shortages. He cautioned that this trend could lead to the formation of a black market, where unregulated transactions could flourish.
Khanh further emphasized the risks consumers face when purchasing gold through unofficial channels. “The quality of the gold they buy is not guaranteed,” he warned, highlighting the potential for counterfeit or substandard products.
Government Intervention Needed
To address the gold supply issue, Khanh advocated for increased production or imports. He suggested that the government should consider resuming its production of gold bars or facilitating imports from other countries to alleviate the shortage.
The consequences of unlicensed gold trading are significant, as trading without a license can result in fines ranging from VND10 to 20 million. This regulatory framework underscores the challenges faced by both consumers and traders in the current market environment.
Conclusion
The shortage of gold in Vietnam is reshaping the landscape of gold trading, pushing retail investors toward social media platforms and raising concerns about the potential for a black market. As prices continue to rise, the need for regulatory oversight and increased supply has never been more pressing. Industry experts urge government action to stabilize the market and protect consumers from the risks associated with unregulated transactions.
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