Vietnam & World Gold Market News

Vietnam Gold Market News

Is it right time to import gold? 2009-03-31 - TBKTSG

Though the word’s gold prices have fallen to lower than domestic prices, Vietnamese enterprises are still not considering importing gold.

Local newspapers last week quoted a gold trading company as saying that the State Bank of Vietnam should grant quotas to import gold at this moment, when gold prices in the world are now lower than domestic prices. However, the Vietnam Gold Business Association said that to date, it had not received any proposals from enterprises to be granted quotas for gold imports.

Deputy Chairman of the association Huynh Trung Khanh said that enterprises have not asked for quotas for gold imports because they could not make profit from the current gap between the world’s and domestic gold prices.

On March 30, for example, the world’s gold price was VND19.8mil/tael, while the domestic price the same day was VND19.97mil/tael, which means the gap of VND170,000/tael. If counting other expenses in importing gold, sale prices would be higher than the domestic prices.

“If market prices increase, we should import gold to stabilise the market. But if the market prices are just a bit higher than the world’s prices, we should wait some more time,” Khanh said.

According to Khanh, statistics from the World Gold Council show that in the last 15 years, Vietnam imported some 800 tonnes of gold. Meanwhile, in the first three months of 2009, when Vietnam exported a large volume of gold, only 10% of the imported volume was re-exported. The export volume in the three months was equal to last year’s import volume. As such, it is estimated that people are still holding 700 tonnes of gold.

Therefore, Khanh has denied the opinion of some experts reported recently by local newspapers that people have changed their habit of keeping assets and are not keeping gold at present.

Sharing the same view as Khanh, Nguyen Thi Cuc, Deputy Director of Phu Nhuan Jewellery Company (PNJ), said that her company is not thinking of importing gold at this moment as predicted profit is not attractive enough.

However, Cuc said that PNJ was still preparing documents to apply for quotas for gold imports, which she will submit to the State Bank of Vietnam when the central bank allows gold imports and the company believes the time is right.

A leader of Sacombank’s Gold and Precious Stone Company also said that she did not intend to import gold now. She said that gold imports could lead to a shortage of dollars as commercial banks and big enterprises would have to use big sums of dollars to import gold. Meanwhile, production enterprises, which need dollars to import materials for production, are having difficulty getting dollars.

However, enterprises still want to see the market operate normally. Cuc said that gold imports should be allowed to help balance domestic supply and demand when there is the big gap between the world’s and domestic prices.

Cuc thinks that the State Bank should think of importing gold at a reasonable level, so that the imports do not affect the foreign currency supply, while domestic enterprises still have gold to sell. The gold imports and exports will help make domestic prices closer to the world’s prices.

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