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Speculators cause domestic gold hike
The price of gold on the local market has risen due to possible speculation rather than a supply shortage, according to Nguyen Van Giau, governor of the State Bank of Viet Nam (SBV).
The global gold price set new records in the past few days, as did the domestic gold market.
The SBV and the Viet Nam Gold Association had kept a close watch on the market in the last few days, and discovered there was no shortage of gold, Giau said, adding that speculation was possibly the cause for the price rise.
Domestic gold prices in August and the first half of September were lower than the world price. But currently the domestic price is VND400,000 per tael higher than the global price.
The SBV was working with other agencies, including the police and market management, to discover the reasons behind the price hikes.
"With this kind of sensitive item, our policy is not to completely ban gold imports, but gold companies are not permitted to import any volume they want," Giau said.
"We are establishing a management framework for gold trading and imports so that it is suitable with a market economy. We will collect ideas from ministries and industries when we complete it."
Nguyen The Hung, general director of the Viet Nam Gold Investment and Trading Company, said the gold price on the domestic market would be equal or even lower than the world price if the SBV permitted gold importers to import gold.
However, the Government has stopped granting permits for gold imports, which indicates that it no longer considers gold an essential item, according to an expert.
In addition, the higher gold price had not affected people's lives since few people conducted their transactions in gold, he said.
Prices
The gold price on the domestic market yesterday morning fell to VND31.15 million (US$1,597) per tael (1.2 ounces) after it reached a record of more than VND31.3 million ($1,605) per tael on Wednesday, following an upward trend in global gold prices.
On Wednesday, most gold shops in HCM City raised their price by more than VND700,000 ($21.3) over the Tuesday price to VND31.25-31.36 million per tael.
Yesterday morning, SBJ gold was buying and selling at VND31.15 million ($1,597) and VND31.18 million ($1,599) per tael, respectively.
Sai Gon Jewellery Holding Co yesterday bought the precious metal at VND31.14 million and sold it at VND31.18 million per tael, a reduction of VND130,000 – VND170,000 against Wednesday.
The global gold price on Wednesday reached an all-time high of $1,313 an ounce on speculation that a global economic recovery would stoke inflation.
In Asia, the metal slightly fell yesterday morning to $1,309 an ounce.
The weakening of the US dollar on the world market has also contributed to the gold price hike, analysts have said.
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