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Gold rush
Banks and gold suppliers are vying to establish gold exchanges to serve investors’ heightened interest in the metal.
Within the past month, the number of new accounts opened at the Saigon Gold Exchange doubled to 3,700, bringing its daily trading value up to VND7 trillion and traded amount to 400,000 taels.
Five new gold exchanges will soon be opened, with another one currently in the works, to meet investors’ increasing demand to invest in gold rather than the relatively quiet stock market.
Saigon Jewelry Company (SJC), SJC Stock Company, Ha Thanh Stock Company and the Export and Import Joint Stock Bank (Eximbank) will join hands to open one exchange, while Intergold Investment Joint Stock Company, DongA Bank and Phu Nhuan Jewelry Company plan to jointly establish another.
After opening its own jewelry arm, the Saigon Thuong Tin Bank will set up a gold exchange, while the president of Viet A Commercial Bank Pham Duy Hung said his bank was also interested in launching one.
The Vietnam Gold Trading Association plans to open two gold exchanges – one each in Hanoi and Ho Chi Minh City – by this year’s end and has entrusted Intergold with delivering training sessions about gold investment strategies for investors and interested businesses.
Most exchange operators say they will introduce a variety of gold types on their trading floors in addition to the generic ones produced by SJC.
A president of a jewelry company who wished to remain anonymous said the key reason banks and jewelry companies are keen to establish gold exchanges is profit, as exchange operators can collect up to billions of dong daily in trading fees.
Banks and jewelry companies who plan to open exchanges say trading floor customers should differentiate the founders’ roles as gold traders and exchange operators, as they are separate responsibilities that would safeguard against rampant speculation.
Vice Chief of the State Bank of Vietnam’s Foreign Currencies Department Phi Dang Minh said although gold exchanges have long been a fixture in foreign markets, they are still relatively new in Vietnam.
The central bank has yet to decide which department to delegate the responsibility of overseeing and regulating gold exchanges, Minh said.
“But we will study foreign models as soon as possible to develop a regulating framework appropriate for Vietnam.”
Market in perspective
Gold prices have been declining in recent weeks due to renewed faith in the American economy and dollar.
Lower gold prices, which slid to around US$900 per ounce last month from the previous figure of more than $1,000 per ounce, have been fueling investors’ interest in the metal.
Some experts say international gold will continue to fall to $850 per ounce if the US economy recovers and central banks sell gold at its present high prices.
For investors who expect gold prices to rise and plan to stockpile gold now as it is relatively cheaper, experts advise caution as it is too early to say whether gold prices will go up or down.
Thanhnien
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