Gold trading firms want more import quotas

Many enterprises have petitioned the State Bank of Vietnam for more quotas on gold import to replenish their stocks that are being depleted following feverish buying these days.

A senior executive of Saigon Jewelry Holding Co. (SJC) said his company imported over two tons of the yellow metal this month, but the volume was almost consumed in times of strong trading last week.

Last week, for instance, trading volume at SJC reached an average of some 10,000 taels every day, equivalent to 375 kilos of gold, the executive added.

He said that the company has been seeking more import quotas to increase the supply, which help narrow down the gap between local and world prices in line with the target set by the central bank.

On Monday, the gold trading volume was not as strong as in previous days, showing a sign of slowdown in the demand for gold. SJC, thus, would choose the right time to buy gold from the global market, instead of importing the precious metal at any cost as seen during the gold fever earlier.

Similarly, Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry Joint Stock Co., (PNJ), said that her firm had already submitted the suggestion last week, but had not received any feedback from the central bank.

However, Cuc observed that at present enterprises found it easier to ask for more quotas, since the central bank wanted to bring local and global prices on parity.

During last week alone, the selling volume of PNJ reached over 3,000 taels of gold every day, which doubled the previous week’s figure. Sometimes, the company could not have the imported one arriving on time, prompting it to halt bullion trade at times.

Meanwhile, Nguyen Ngoc Que, general director of Sacombank Jewelry Co., (SBJ), noted that in previous days the selling volume far exceeded the buying amount, leading to the need to complement the supply.

Sacombank, the parent company of SBJ, also sent the same petition to the central bank, and SBJ has just been granted with a quota of one ton of gold.

Overall, the whole system of Sacombank had sold around 20,000 taels per day during last week, but the demand is now seen taking on the downtrend to about 6,000 taels on Monday.

Despite the lower demand these days, the differential between local and global prices still remains due to the time needed for the imported gold to arrive in the country, said a leader of a big gold trading company.

For example, the price at home on Monday was still VND1.2 million per tael higher than the global price. A tael equals 1.2 troy ounces.

Importing gold requires a big volume of foreign currencies, so the central bank has to take gold import into careful consideration for macroeconomic stability. A gold trader said efforts must be taken on the part of the central bank to strengthen public confidence in Vietnam dong and thus minimize the demand for holding gold. – SGT

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