Why pure gold ring prices surge in Vietnam?

By Quynh Trang   February 28, 2024 | 12:39 am PT
Why pure gold ring prices surge in Vietnam?
Gold rings are seen at a shop in Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Pure gold ring price has been surging to new peaks and have exceeded global rates by a large margin due to a shortage of gold supply.

Prices of 24K gold rings have been rising fast since October to around VND65 million ($2,640.66) per tael, up 14.4% in four months.

Global rates, in comparison, have increased by 9.6% to around VND59 million per tael.

Retail chains such as DOJI and PNJ have been selling only a limited supply of gold rings, and customers are often told new arrivals are expected in March.

Mi Hong, a decades-old jewelry chain in HCMC, limited each customer to buying only one mace at a time. A mace is 3.75 grams or 0.12 ounces.

The reason for the shortage of gold rings is a lack of supply in domestic gold while the government has banned businesses from importing gold for a decade.

Nguyen Thanh Long, chairman of the Vietnam Gold Traders Association, said that jewelry businesses are having trouble identifying the origin of gold when they make purchases.

As using imported gold to make jewelry is banned, "they are concerned of the legal risks when buying gold," he said.

His association last year proposed that three leading jewelry companies, SJC, DOJI and PNJ be allowed to import 500 kilograms of gold each but were not approved.

Long also said that pure gold rings have a lower profit margin than other products. 24K gold rings in Vietnam are often purchased as an investment asset and consumers prefer other type of gold rings to use as jewelry.

24K gold rings, therefore, are not prioritized by companies in their business strategy and therefore supply is low, he added.

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