Lifted import quota cools gold rush

Domestic gold prices yesterday plunged by VND1.2 million (US$61.53) from Thursday’s record high to around VND31.85 million ($1,630) per tael, following the State Bank of Viet Nam’s announcement late Thursday that it had approved additional gold imports. A tael is equal to 1.2 ounces.

Gold-selling districts in Ha Noi and HCM City saw prices change at least three times in the morning and early afternoon, with Saigon Jewelry Co, Sacombank Jewelry Co, Bao Tin Minh Chau, Agribank Jewelry Co and Phu Nhuaân Jewelry Co each quoting buy/sell prices at VND32.1-32.24 million per tael.

But late Thursday, with the domestic gold price VND1 million (around $50) higher than global prices, State Bank governor Nguyen Van Giau decided to allow 10 major gold trading enterprises to import an additional three tonnes of the precious metal over the course of the next week.

It marks the second time the central bank has allowed additional gold imports this year, allowing seven tonnes to be imported in July – a figure decried as too low.

“When people knew the gold import quota was so restrictive, many bought up gold,” said Sacombank Jewelry Co general director Ton The Vinh Quyen.

But not everyone welcomed yesterday’s move by the State Bank.

“Gold imports at this time may soak up the limited supply of dollars, while helping drive inflation up in the last two months of the year, when it is usually higher anyway before the lunar new year,” said Do Thi The, a forex investor.

Similar concerns yesterday drove the cost of the greenback on the black market to VND19,850-19,880, about VND20 higher than on Thursday. However, bank exchange rates remained unchanged at VND19,470-19,500 per dollar, while the interbank rate continued at VND18,932.

The State Bank again yesterday denied rumours of a dollar shortage, saying that it continued buying up dollars from credit institutions in the third quarter, suggesting a plentiful dollar flow in circulation. However, yesterday’s comments from the State Bank marked the third time since February it has issued a similar message to the public. — VNS

Tags: vietnam gold, Vietnam gold imports, Vietnam gold market

Posted by VBN on Oct 9 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