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Illegal gold trading floors existing, provoking watchdog agencies   2012-06-18 - VietNamNet

Gold trading floors have been banned in Vietnam for the last two years. However, the trading floors have never been shut down as ordered by the State Bank.


If typing “san giao dich vang truc tuyen” (online gold trading floors) on Google, one would find the information and addresses of tens of online gold trading floors.

In order to become the member of the trading floor, one would have to pay 70 dollars as the membership registration fee. Some trading floors offer very attractive conditions to investors. They allow making transactions with the high leverage ratio of 1:100, 1:500 or 1:1000, which means that investors just need to have 100 dollars to make the transactions worth 1000 dollars, 5000 dollars or 10,000 dollars.

Especially, online trading floors commit not to collect cash pay-in and withdrawal fee, while every member would be given an account, and the purchase or sale orders would be carried out via Internet.

The high profits promised by trading floors may dazzle everyone. An officer of a trading floor told a client that if he buys 2 lots of Loco London gold (200 ounces) via the trading floor at 1310 dollars on January 28 (Friday), with the deposit money of 2000 dollars, then he sells the 2 lots at 1330 dollars on the same day, he would make the profit of (1.330-1.310) x 200 - 0 - 0 = 4.000 dollars.

According to Tran Tien Dung, an investor on the trading floor, there are about tens of such trading floors. Emails have been sent continuously to investors, inviting them to make gold transactions via their accounts. Especially, some gold trading floors have employed beautiful girls, who are in charge of inviting investors to join the floors.

Dung said that he has just been persuaded to join the trading floor. The marketing officer told him that it would be more profitable to trade gold than stocks.

“You would make profit with gold trading when the prices go up and down as well. Investors can take money back at any time. There is no risk, because we have lawyers who take care about that,” an officer told Dung.

However, Dung said that it is very risky and the floors’ owners always hold the handle of the knife. The provisions in the account opening contract prove to be “vague”. Meanwhile, investors incur losses in case the Internet connection interrupts, the banker’s account is blocked, and when the investors’ orders cannot be matched because of the electricity cuts, systematic errors.

Especially, observers have pointed out that the banker can “fill in investors’ pockets.”

“The only thing investors can enjoy when joining the trading floors is the opportunity of making investment,” Dung concluded.

He has also warned that inexperienced investors are very likely to take profits. It is estimated that 95 percent of new members lose all their money in the first two years. If they can make profit from the third year would still depend on their capability. However, it is estimated that only 5-25 percent of investors can break even or earn money with the trading deals.

“Experienced investors would be satisfied if they can make the profit of 1-7 percent, while the profits would never reach 10 or 20 percent as said by the brokers,” he said.

A big challenge for watchdog agencies

Two years ago, the State Bank of Vietnam made the decision to shut down gold trading floors after it found a lot of consequences caused by the floors. However, the gold trading floors have been operating since then, attracting more and more investors.

Le Dang Doanh, a well-known economist, thinks that it would better to allow setting up gold trading floors, where the members must be the companies and commercial banks and they have to pay high deposit money to avoid risks.

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