Local firms hoarding gold for export despite low profit margin

Local gold exporters are rushing to hoard gold for export despite low profit margin as they could enjoy the dollar exchange differences, the local newswire Sai Gon Tiep Thi (SGTT) reported September 21.

Local gold exporters are rushing to hoard gold for export despite low profit margin as they could enjoy the dollar exchange differences, the local newswire Sai Gon Tiep Thi (SGTT) reported September 21.

Last weekend, world gold prices soared to new all-time high spurring local firms including ACB, Sacombank, Agribank, PNJ, Tan Van Hung, Kim Ngoc Phu and others to store up gold for export despite the local sluggish trading.

While exporting gold yields only VND30,000 profit a tael in August, down 20%-30% from those in May and June, local gold exporters are boosting shipping gold abroad to earn the dollar exchange differences, the newswire reported, citing that a firm exported over three tons of gold from September 15 to 17.

From September 15 to 17, some gold exporters sold dollars to the bank at a price of up to VND19,509-VND19,510.

“On September 16, local gold exporters rushed to buy gold on expectation of world gold price hike, narrowing the bid-ask spread to only VND20,000/tael or even an investor sold a thousand of tael at the quoted ask price” shared a deputy director of a gold firm.

“Despite the local gold prices closely follow the global ones, local firms still hoard gold on expectation that world gold price could hike only half an ounce. Earlier, they only export gold as world gold price exceeds local ones as much as hundreds of thousand dong a tael”, said Nguyen Thi Cuc, gold trader at PNJ company.

Vietnam exported $2.4 billion in the first eight months of the year, contributing substantially to narrow the trade deficit, said the export-import department, Ministry of Industry and Trade, cited that trade deficit as of August was $7.53 billion.

It is estimated that local firms have exported more gold in the past month than in May and June. – Stoxplus.com

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