Financial experts claim this is the quietest and gloomiest period of the gold market in Vietnam. Gold trading floors have begun shutting down already, 20 days before the March 30 deadline. Meanwhile, the in-kind gold market remains quiet.

Gold exchanges dwindle

The Government has ordered gold trading floors to close by March 30 , 2010 at the latest, but most have already stopped lending for gold investment since January 15. They have also announced closures prior to the deadline. Immediately after the announcement, the atmosphere at gold exchanges began to “die”, months before the deadline.

Lu Trong Hai, Deputy Head of the Brokerage Division of VNS Wall Street gold trading floor, revealed that after the decision, the gold trading floors were in chaos. Both leaders and officers rushed around seeking new jobs. Hai described floor operations after the announcement as “drowsy.”

Hai calculated that professional investors have withdrawn all their capital and only some five percent of capital from small individual investors have been left on account, with balances of less than 200,000 dong.

“We have called on investors to come to close their accounts, but they have not arrived. This has put us in a difficult position, because we must continue operating until there is no money left in investor accounts,” Hai explained.

Leaders of Vang The Gioi (VTG) Company said that the company has finished all the necessary steps to close the gold exchange floor and it is preparing to shift to running a merchandise trading floor, using the staff and equipments it has already. Meanwhile, VGB Company reported that it has nearly lost all the tens of billions of dong it injected in its gold trading floor. VGB has laid off 40 out of 130 officers before it shifts to another kind of business.

In-kind gold market gloomy

Surprisingly, gold investors who have left the gold exchanges assert that they do not intend to invest in the in-kind gold market.

Investor Nguyen Dinh Hung withdrew money from the gold trading floor, but does not intend to pour money into in-kind gold, because it is even more risky.

Other investors say that the recent bankruptcy of Tuan Tai Gold Shop in HCM City made people feel insecure. Therefore, investors are not interested in gold as they were three or four years ago.

Tran Viet Nam, a senior executive of Bao Tin Minh Chau Gold Company also estimated that the transaction volume has decreased by 50 percent compared to the same period of 2009. Nam said very few people made transactions even when the gold price dropped sharply to 25,300,000 dong per tael.

VIetNamNet/GD& XH