Gold shortage makes local prices top global

The gap between local and global gold prices are widened on shortage of gold and the SBV’s temporary gold import quota expansion could not help easing the prices in long term.

The gap between local and global gold prices are widened on shortage of gold and the SBV’s temporary gold import quota expansion could not help easing the prices in long term, said Nguyen Thi Cuc, Phu Nhuan Jewelry Joint Stock Company’s Vice Director.

Local gold prices were VND0.5million-VND1million higher than global ones at some point, local media reported.

In August and September when global gold prices soared some local lenders borrowed gold to export $774million and $480million worth of gold in the form of jewelry, respectively, expecting that they can make profit when the gold prices come down later, Cuc shared information.

However, gold prices continuously extended its rising momentum in the last two weeks, forcing local gold borrowers to boost up their buying to cut loss, she added.

Meanwhile, Vietnam exported nearly 100 tons of gold in the first nine months of the year ($2.75billion) while imported only 9 tons in the same period, threatening the supply-demand balance of gold and in turn bolstering local gold prices faster than global ones, the Thanh Nien online newspaper reported earlier.

The total quota of 3 tons of gold allowed by the SBV on late October 7 is only adequate to offset the volume of gold exported in the form of jewelry earlier, she said, adding that the SBV’s hardly helps in the long run unless the gap between global and local gold prices is narrowed. – Stoxplus.com

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

Posted by VBN on Oct 14 2010. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry