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Providing some golden arguments
A bunch of measures have been proposed to ensure a healthy local bullion market. The Vietnam Gold Traders Association (VGTA) recently tabled a solution package in light of bullion market management. It argued that giving birth to new regulations on gold trading management would help reign in inflation, contain trade deficit and release gold sector’s immense growth potential.
Accordingly, the VGTA suggests the state lift up the gold import duty from current zero per cent to 0.5 per cent and relax current overly high gold export duty of 10 per cent.
Gold imports and exports being taken on a more frequent basis would help connect local and the world gold market and abate smuggling, according to the VGTA.
VGTA also assumed it would be important to work out conditions under which gold plate trading is eligible to curtail the number of private gold businesses.
Some particular conditions are businesses eligible to trade in gold plates when they get the business registration licence, having at least VND30 billion ($1.4 million) in total chartered capital and report at least VND500 billion ($24.1 million) in annual revenue in the last two years before getting the gold plate transaction licence.
VGTA’s general secretary Dinh Nho Bang said people would not give up the time-honoured habit of hoarding gold on the back of escalating and persistent inflation. Therefore, if a band was placed on gold plate trading, they would possibly turn to hoarding gold in other forms such as jewels and gold-made artworks, thus confusing gold market management, Bang said.
ACB Gold Centre Director Tran Trong Quoc Khanh said managing gold transactions through a single window would dilute the market’s liquidity.
To facilitate the integration with the local bullion market, VGTA suggested the Vietnamese government found a national gold exchange.
Bang said the birth of national gold exchange would create an impartial and transparent playing field for gold traders, curtail the demand for hoarding gold from people, reducing smuggling, fine-tune the gold price in the domestic market with the world market’s and raise a considerable amount of idle gold from the community into economic development.
The exchange will help state management bodies keep closer eyes on gold transactions in the market to intervene when necessary and circumvent price manipulation cases for a healthy market performance, according to the VGTA.
VGTA also proposes diversifying gold trading types in the exchange, such as futures contracts, to attract investors.
Thuy Vinh
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