After Vietnam's central bank assigned SJC as country's gold monopoly, adverse impacts of the new move outweighed advantages, analysts said.
HANOI(BullionStreet): After Vietnam's central bank assigned SJC as country's gold monopoly, adverse impacts of the new move outweighed advantages, analysts said.
They said cases of gold smuggled in from other countries or not originally produced by SJC was being illegally stamped with the company's logo and being sold in the market is on the rising.
The trading in fake SJC gold bars, fueled by the government's decision to recognize it as the sole national brand, has caused bad impacts.
Experts said it is hard to discern any difference between fake bars and the original with the naked eye, the quality is often lower.
They said smuggled gold was being used to make the fake SJC bars because of the huge difference in domestic and international gold prices, with Vietnam prices remained higher by VND2 – 3 million ($100 – 150) per tael.
The fake SJC gold bar is being made in other countries and brought into Viet Nam through the northern border.
Analysts said hike in number of fake SJC gold bars is also because many gold shop owners deliberately devaluate non SJC gold products.
As a result, the market witnessed short supply on the days when the demand increases sharply, thus prompting sellers to push the prices up, widening the gap between the domestic and the world prices.
Under the new decree, non-SJC gold would have to be converted into SJC gold. Therefore, enterprises have to queue up to wait for their turn to have their non-SJC gold converted.
Many tons of non-SJC gold still has not been converted into SJC gold.
Under the currently applied procedures, the State Bank would have to verify the origin and the legitimacy of the gold to be converted. After that, SJC, which processes bullion gold for the central bank, has to inspect, classify the gold products based on the gold content. Especially, the central bank even monitors the process of converting non-SJC into SJC gold.
SJC or The Saigon Jewelry Company said it is strengthening gold quality testing facilities and advising customers to buy gold from prestigious shops with new packaging that cannot be faked.