The State Bank of Vietnam has designated businesses that will beallowed to import additional gold in an effort to cool down the domesticprice.
The bank said on Sept. 26 that gold price had dropped to its lowestlevel in weeks to just 1,532.45 USD per ounce on global markets – from arecord high of 1,920 USD per ounce on September 6 – leading to dramaticfluctuations on the domestic market. The result has been a domesticgold price that has remained for weeks much higher than the world price.
On the same afternoon, after plummeting to 43million VND (2,067.30 USD) per tael, the domestic gold price quicklysoared to 45 million VND (2,163.46 USD) per tael – 4 million VND(192.3 USD) per tael above the global price. (One tael is equivalent to1.2 ounces).
At the same time, the exchange ratebetween the Vietnamese dong and the US dollar also spiked dramaticallyon the black market, rising to 21,300 VND per dollar, even as interbankand official rates remained at 20,628 VND and 20,834 VND, respectively.
The new gold imports, by increasing supply, were expected to help stabilise some of these fluctuations.
However, Nguyen Thanh Truc, general director of Agribank Gold JointStock Co, warned that gold traders would continue to be able to settheir own prices without management from authorities, and some companiesmight continue to hold supplies back from the market, contributing toprice manipulation.
By late on Sept. 27, DOJI Goldand Germs Group was posting buy/sell prices of 45.05 million VND/44.6 5million VND per tael, while the world spot price on the London BullionMarket was 1,649.90 USD an ounce. The black market foreign exchange ratehad also eased back to 21,270 VND per dollar.
Eximbank general director Truong Van Phuoc said that it was necessary toimport more gold to cool down the overheated domestic market, notingthat domestic commercial banks were holding a significant quantity of USdollars, so the additional gold imports would not affect foreigncurrency reserves.
Meanwhile, Tran Thanh Hai,general director of the Vietnam Gold Business Co, suggested that thecentral bank issue gold certificates to sell to individuals at pricesbelow the market price, discouraging citizens from buying and sellinggold on the market and incurring risks, while helping the country retainits foreign currency reserves.
State Bank DeputyGovernor Nguyen Dong Tien also revealed on Sept. 27 that the centralbank would submit its final draft of a decree on the gold market to theGovernment for approval this week. Under the draft, the State Bank wouldcontrol and intervene in the gold market if needed, preventingspeculation and price manipulation. Trading in gold bars would also berestrained, Tien said.
Individuals and organisationswho wanted to do business in gold jewelry or artworks would be requiredto establish enterprises and meet several stringent requirements, headded. Meanwhile, the central bank has warned investors to be wary ofspeculation and manipulation when trading in gold./.
The bank said on Sept. 26 that gold price had dropped to its lowestlevel in weeks to just 1,532.45 USD per ounce on global markets – from arecord high of 1,920 USD per ounce on September 6 – leading to dramaticfluctuations on the domestic market. The result has been a domesticgold price that has remained for weeks much higher than the world price.
On the same afternoon, after plummeting to 43million VND (2,067.30 USD) per tael, the domestic gold price quicklysoared to 45 million VND (2,163.46 USD) per tael – 4 million VND(192.3 USD) per tael above the global price. (One tael is equivalent to1.2 ounces).
At the same time, the exchange ratebetween the Vietnamese dong and the US dollar also spiked dramaticallyon the black market, rising to 21,300 VND per dollar, even as interbankand official rates remained at 20,628 VND and 20,834 VND, respectively.
The new gold imports, by increasing supply, were expected to help stabilise some of these fluctuations.
However, Nguyen Thanh Truc, general director of Agribank Gold JointStock Co, warned that gold traders would continue to be able to settheir own prices without management from authorities, and some companiesmight continue to hold supplies back from the market, contributing toprice manipulation.
By late on Sept. 27, DOJI Goldand Germs Group was posting buy/sell prices of 45.05 million VND/44.6 5million VND per tael, while the world spot price on the London BullionMarket was 1,649.90 USD an ounce. The black market foreign exchange ratehad also eased back to 21,270 VND per dollar.
Eximbank general director Truong Van Phuoc said that it was necessary toimport more gold to cool down the overheated domestic market, notingthat domestic commercial banks were holding a significant quantity of USdollars, so the additional gold imports would not affect foreigncurrency reserves.
Meanwhile, Tran Thanh Hai,general director of the Vietnam Gold Business Co, suggested that thecentral bank issue gold certificates to sell to individuals at pricesbelow the market price, discouraging citizens from buying and sellinggold on the market and incurring risks, while helping the country retainits foreign currency reserves.
State Bank DeputyGovernor Nguyen Dong Tien also revealed on Sept. 27 that the centralbank would submit its final draft of a decree on the gold market to theGovernment for approval this week. Under the draft, the State Bank wouldcontrol and intervene in the gold market if needed, preventingspeculation and price manipulation. Trading in gold bars would also berestrained, Tien said.
Individuals and organisationswho wanted to do business in gold jewelry or artworks would be requiredto establish enterprises and meet several stringent requirements, headded. Meanwhile, the central bank has warned investors to be wary ofspeculation and manipulation when trading in gold./.
