>> Import quotas issued to help stablise Vietnam\'s gold fever
>> Vietnam grants new gold import licenses, quotas
Vietnamese gold prices took a much needed drop this morning thanks to measures by the State Bank of Vietnam.
The price dropped to VND36.8 million (USD1,840 million) per tael this morning.
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| Gold prices have cooled down |
The fall came after the State Bank of Vietnam (SBV)’s decided to grant gold import quotas on November 9 for a number of banks and gold businesses.
Gold prices in Vietnam higher than world average
As of 9 am this morning (November 10), in Hanoi, Bao Tin Minh Chau Company bought SJC and Thang Long dragon gold at VND36.3 million (1,815) per tael and sold them at VND36.8 million (USD1,840), down VND1.7 million (USD85) per tael compared to peak prices on November 9. This was also VND650,000 lower than the previous afternoon.
On the Ho Chi Minh City market, Sacombank-SBJ Company’s SJC gold was bought at VND36.55 million (USD1,830) per tael and sold at VND36.85 million (USD1,840). The company bought SBJ gold at VND36.56 million (USD1,820) and sold it at VND36.84 million (USD1,842) per tael.
On the morning of November 9, gold prices hit VND38.5 million (USD1,925) per tael. People rushed into buying gold due to the sentimental factor, but with not high amount, with the highest from one to two taels. However, in the afternoon, after SBV Governor Nguyen Van Giau announced that gold imports would be allowed, prices cooled down. During the afternoon of the same day, gold prices were at just between VND36.7 million (USD1,835) and VND37.4 million (USD1,870) per tael.
The price of one US dollar on the free market also decreased from VND21,500 to VND20,950.
Domestic gold prices dropped after SBV’s decision and the price of one US dollar went up by VND300 against November 9. Currently one US dollar is worth between VND20,850 and VND21,250.
In New York, gold prices for delivery in December, 2010, have increased by USD6.9 USD (equal to 0.5%), ranging from USD1,410.1 to USD1,424.30 per ounce.
Meanwhile, on the New York market, gold prices for spot delivery were down by USD17.2 to USD1,393 per ounce. This morning, gold prices of spot delivery on the Asian market reported by Kitco.com were at USD1,420.3 per ounce.
Based on the exchange rate, Vietnam’s gold prices are VND3.6 million (USD180) per tael higher than average world levels, including taxes and other expenses.
USD reserves for illegal gold import
On November 9, SBV decided to grant gold import quotas for a number of banks and enterprises which were hoarding foreign currency, aiming to ease the local gold market which was “overheating”. Unlike the quota issued in early October, the import licenses are valid for two weeks, which will help the banks and companies to take careful considerations on suitable import time to support the local market and also mitigate risks resulting in price changes on the world market. SBV Governor Nguyen Van Giau clarified that, “SBV closely supervised the market changes and then considered the quota grant time. We have not given any preference to firms and do not suffer from outside pressure.”
Giau shared that the change in gold prices also impacted the exchange rate, bringing one US dollar to VND 21,500. He said it is partially due to USD reserves for illegal gold imports. Under the Ordinance on Foreign Exchange, individuals who receive overseas remittances can deposit money, withdraw it from the bank, or bring it with them. Once reserving USD is illegal, SBV can’t interfere in the way people use their capital. However, SBV plans to propose a revision of the ordinance.
