Customers buy gold at Kim Dung Thong gold shop in the central province of Nghe An’s Vinh city. (Source: VNA)Hanoi (VNA) -Transactions in the domestic gold bar market dropped sharply as many goldholders selling their precious metal for VND to reinvest in business,production and consumption.
According to the State Bankof Vietnam (SBV)’s Foreign Exchange Management Department, as local appetitefor the precious metal has been declined sharply with only some 10,000 taels (atael equal to 37.5g) of gold to be traded per day on average, down as much as75 percent compared with 2013.
Despite the sharp pricehike in the global gold market in the wake of a series of world events leadingto volatility, such as tensions on the Korean peninsula, the domestic goldmarket has remained stable.
Nguyen Ngoc Canh, directorof the department, said that it is quite a contrast to the situation prior to2013 when the domestic gold market often experienced chaos as the global goldprice rocketed. At that time, it was common to see locals queued up in front ofgold shops, patiently waiting for their turn to enter and buy the preciousmetal for speculation.
This changed when the SBVremoved the regulation on allowing commercial banks to deposit and lend gold in2013. Instead, gold holders now have to pay fees to commercial banks if theywant to use the custody service to store their gold at banks.
Thanks to the policy, thereis no longer any turbulence in the domestic gold market despite a sharp changein price in the global market.
Statistics from thedepartment revealed that the quantity of gold under custody at commercial banksreduced sharply to only 2.89 tonnes by June 31 this year, compared with 32tonnes in 2013, 21 tonnes in 2014, 10 tonnes in 2015 and three tonnes in 2016.
The department attributedthe downward trend to gold holders selling gold for VND to reinvest inproduction, business and consumption.
Given lower demand forgold, the SBV has not had to import any gold bar since 2013.
On September 14, SJC-brandedgold was trading at 36.5 million VND and 36.7 million VND (1,607-1,616 USD) pertael for buying and selling, respectively, down roughly 100,000 VND against theprevious day.
The gap between Vietnameseand global gold prices is standing at 100,000 VND per tael, shrinkingsignificantly from millions of VND fewyears ago.-VNA
VNA
