Nguyen Van Binh, governor of the State Bank of Vietnam, announced on Aug. 24 that he will allow more bullion imports if necessary to stabilise the over-heated domestic gold market and to keep prices stable.
Measures will be applied to control the distance between domestic and global prices, somewhere under 400,000 VND (19.21 USD) per tael," Binh said, adding that if the price disparity was allowed to widen it would encourage manipulation and speculation.
The domestic price is currently 1-1.2 million VND higher than the global price.
This morning, bullion was traded at 1,903.70 USD per ounce on Kitco. One tael is equivalent to 1.2 ounces.
Local gold traders quoted prices ranging from 48.55-49.09 million VND (2,331-2,357 USD) per tael.
Vietnam is a major gold consumer. Most of the bullion in the country is imported. Diminutive gold reserves are unable to significantly affect the market, Binh said.
On August 9, the central bank get major gold dealers an import quota of five tonnes. About three tonnes have already come into the country to meet sudden strong demand, which has driven the domestic price up 3.6 percent to 46 millionVND (2,203 USD) per tael that morning.
The State bank's move led to prices immediately falling to about 45 million VND per tael, but the decline was only temporary.
Binh estimates that Vietnamese individuals and firms are holding 300-500 tonnes.
Each day for more than a week, the gold price has hit new highs, eventually reaching just under 50 million VND per tael on the domestic market and 2,000 USD an ounce globally.
The Governor added that balancing imports and exports to stabilise the gold price was just a temporary measure. In the long run, the central bank plans to adopt comprehensive policies to stabilise the gold market and increase national reserves, he said./.
Measures will be applied to control the distance between domestic and global prices, somewhere under 400,000 VND (19.21 USD) per tael," Binh said, adding that if the price disparity was allowed to widen it would encourage manipulation and speculation.
The domestic price is currently 1-1.2 million VND higher than the global price.
This morning, bullion was traded at 1,903.70 USD per ounce on Kitco. One tael is equivalent to 1.2 ounces.
Local gold traders quoted prices ranging from 48.55-49.09 million VND (2,331-2,357 USD) per tael.
Vietnam is a major gold consumer. Most of the bullion in the country is imported. Diminutive gold reserves are unable to significantly affect the market, Binh said.
On August 9, the central bank get major gold dealers an import quota of five tonnes. About three tonnes have already come into the country to meet sudden strong demand, which has driven the domestic price up 3.6 percent to 46 millionVND (2,203 USD) per tael that morning.
The State bank's move led to prices immediately falling to about 45 million VND per tael, but the decline was only temporary.
Binh estimates that Vietnamese individuals and firms are holding 300-500 tonnes.
Each day for more than a week, the gold price has hit new highs, eventually reaching just under 50 million VND per tael on the domestic market and 2,000 USD an ounce globally.
The Governor added that balancing imports and exports to stabilise the gold price was just a temporary measure. In the long run, the central bank plans to adopt comprehensive policies to stabilise the gold market and increase national reserves, he said./.
