Gold still feverish despite new import quotas

The local gold price still fluctuated wildly on Tuesday, rising by VND1.5 million from the previous day to VND45.6 million a tael, but the difference between the local and global prices narrowed after the central bank swiftly announced gold import quotas. However, the dollar also entered the upward price spiral as bullion traders needed the greenback to import gold.

An elderly man sells two taels of gold at a gold shop in HCMC on Tuesday. The local gold price climbed up to VND45.6 million a tael on Tuesday compared to some VND44.1 million the previous day – Photo: Kinh Luan HCMC – The local gold price still fluctuated wildly on Tuesday, rising by VND1.5 million from the previous day to VND45.6 million a tael, but the difference between the local and global prices narrowed after the central bank swiftly announced gold import quotas. However, the dollar also entered the upward price spiral as bullion traders needed the greenback to import gold.

The precious metal opened up strongly to VND46.2 million a tael, but the price eased to VND45.1 million following the news of gold import before bouncing up to VND45.6 million. A tael equals to 1.2 troy ounces.

The central State Bank of Vietnam announced on Tuesday it allowed gold import quotas of five tons, which can be followed by another five tons to complement the local gold stock that has been substantially depleted due to strong exports in previous weeks.

However, the central bank advised people to be cautious about buying gold to avoid losses given the complicated and uncontrollable global gold prices.

On the European market, gold prices at 4:45pm were US$1,766.8 an ounce, meaning it was still VND442,000 per tael lower than the local price exclusive of tariff and costs given the exchange rate in the free market at VND21,200 to the dollar. This difference fell sharply against that of VND1.6 million per tael in the morning.

Meanwhile, local banks simultaneously pushed the dollar price up to VND20,814, which was the ceiling price regulated by the central bank.

Vietnam Import Export Bank, or Eximbank, raised the dollar buying price to VND20,750 and selling price to VND20,814, up VND14 against the previous day. Later, this bank raised the buying price closer to the ceiling price of VND20,810 in the afternoon.

At Asia Commercial Bank (ACB), a dollar bought VND20,810 and sold for VND20,814, not much different from the rate at DongA Bank, which quoted the greenback at VND20,780. The interbank rate announced by the State Bank still remained unchanged at VND20,608.

But signs of the dollar squeeze were widely perceived, as banks were only ready to sell the dollar at a certain fee, meaning the forex rate was higher than quoted.

Experts predicted that the dollar price would kept climbing as bullion traders needed the foreign currency for gold import.

The dollar traded outside banks in HCMC on Tuesday rose to VND21,150 from the closing price of VND21,000 in the previous day. It later closed up at around VND21,200 – VND21,400.

Observers said it was difficult to predict movements of gold and dollar prices in the coming days.

Despite the central bank’s approval for gold import, bullion traders said they still had not been formally given quotas.

Nguyen Ngoc Que Chi, CEO of Sacombank Jewelry Company, said if her company was to obtain the gold quota on Tuesday, the company would contact sellers immediately, and the imported gold would be delivered on Wednesday. – SGT

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices