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Top domestic gold prices cause smuggling concerns
The local price of gold has remained at VND1.3 million (US$77.38) per tael higher than average global gold prices, raising concerns about gold smuggling across borders.
Yesterday, Sai Gon Jewellery Holding Co listed buying/selling gold prices at about VND16.55/16.65 million ($988) per tael (one tael equivalent to 1.2 ounce). Phu Nhuan Jewellery Co offered buying/selling prices at VND16.75/16.9 million ($1,000) per tael, slightly up from VND16.70/16.85 million per tael last week.
Gold on the global market yesterday was $734.95 an ounce, with prices fluctuating around this figure over the past few weeks.
There were no concrete figures about gold smuggling of the country, however, gold smuggling into Viet Nam was rather possible at this time, said Huynh Trung Khanh, a member of the World Gold Council in Viet Nam.
People would be ready to smuggle gold across the border, if they earned VND200,000-300,000 per tael. It naturally follows that smuggling is sure to be occurring when the local gold price is VND1.3 million per tael higher than the global gold price, according to Khanh.
In fact, gold experts said that gold smuggling was likely to be even more encouraged with the current strong demand and short supply in the local market.
Tran Huu Dang, business manager at Bao Tin Minh Chau Jewellery Co admitted that the number of clients coming to buy gold was much larger than those coming to sell recently. Most of them said they were buying gold to store.
"Looking around channels like keeping US dollars or trading stock is obviously unattractive and risky now, I really want to save my money in gold," said Pham Thi Hoa, an client at Bao Tin Minh Chau.
Some other gold shops on Tran Nhan Tong Street reported that they had sold thousands of taels of gold, but it seemed not to satisfy the public's demand.
In the first six months of this year, Viet Nam imported about 60 tonnes of gold mainly from international banks/corporations like MKS Group - precious metal providers, the Standard Bank of Singapore, and some of Australia and Japan.
According to unofficial gold expert sources, local gold demand in the third quarter of this year increased more than 15-20 tonnes. The demand is expected to become even larger in the next two months leading up to Tet (Lunar New Year) festival.
Meanwhile, gold imports have been temporarily restricted in Viet Nam for the last four months, which is in line with the common efforts to control inflation.
General secretary of Viet Nam Gold Trading Association Dinh Nho Bang said that in recent months with inflation becoming under control, gold trading enterprises hoped the Government would soon resume gold import to meet local demand.
"Or gold smuggling might get more serious, which as a result would have negative effects on local gold and foreign exchange markets," said Bang.
VNN
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