Gold prices skyrocket, Vietnam rushes to export gold

International financial institutions have increased their purchases of gold, which has pushed the gold prices up in the world market. In Vietnam, trade companies are trying to collect gold for export.

Just within half a month, the gold price has increased by 100 dollars per ounce, or 2.4 million dong per tael since the beginning of July. Meanwhile, the domestic gold price has increased more slowly: SJC brand gold has increased by 1.8 million dong in prices.

Nguoi lao dong has reported that Vietnamese people now wait for the gold prices to increase and they will sell gold when the prices go high, while they do not intend to purchase gold at this moment.

Several days ago, when the gold price soared to 39 million dong per tael, people rushed to sell gold. Goldsmith companies have also confirmed that they purchase more than sell in recent days. Then a question has been raised that whom the companies will sell gold to.

The answer is that goldsmith companies are ready to collect as much gold as possible, because they can export the gold for big profits. Especially, South Africa is a big market.

The dong/dollar exchange rate has been stable in recent days at 20,600 dong per dollar. Meanwhile, as the world’s gold prices have been increasing too rapidly, the domestic prices are usually lower by 300-500,000 dong per tael.

Therefore, businesses well understand that they would get fat profits if exporting gold. Some businesses have revealed that the gap between the world’s price and the domestic price is big enough to bring huge profits.

Currently, the gold export tariff of 10 percent is being applied to the gold products with the gold content of 99 percent and higher. In order to enjoy the export tariff of zero percent, goldsmiths have been exporting the products with the gold content of 98.5 percent and lower.

Nguoi lao dong has quoted Nguyen The Hung, Chief Representative of Swiss MKS, a gold trading company, as saying that the higher gold price in the world should be seen as the golden opportunity for Vietnam to export gold.

Vietnam’s gold exports so far this year have been equal to 1/3 of that in the previous years and much lower than the exports of other regional economies, such as Thailand, Cambodia, Hong Kong and Singapore. It is because Vietnam imposes high tax on gold exports.

According to the General Department of Customs GDC, the export turnover of precious stones and precious metals had reached 1.203 billion dollars by June 30, 2011. In June alone, Vietnam exported 806.255 million dollars worth of the products, an increase of 133 percent over the previous month.

VnExpress has quoted its source from the Vietnam Gold Business Association as saying that the export activities were most bustling in May and June, when the world’s prices were much higher than the domestic prices, which allowed Vietnamese enterprises to make a profit of two billion dong for every ton of gold exported.

Goldsmith companies have proposed the State Bank of Vietnam not to tighten the gold export strictly.

Chair of DOJI Group Do Minh Phu said that Vietnam should encourage to export gold, because this will not only help create more jobs, but will also help earn more foreign currencies for the national economy.

“Other countries in the world are increasing their purchases of jewelry. They do not set high requirements on the sophistication of the products, while they favor the products with high gold content,” Phu said.

High gold exports were considered as a good factor which helped ease Vietnam’s foreign trade imbalance in the first six months of the year. Thanks to the gold trade surplus of 800 million dollars, the trade deficit has decreased significantly from 20 percent of export turnover to 15.7 percent by the end of June. – Vietnamnet

Tags: vietnam gold, Vietnam gold exports, Vietnam gold market