Vietnam eyes gold import revival to align local prices with global market

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In a surprising twist that could shimmer brightly for gold enthusiasts, Vietnam is on the cusp of permitting companies to import gold for the first time in over a decade. The goal? To close the widening chasm between local and international gold prices. This golden revelation was unveiled by Huynh Trung Khanh, the vice chair of the Vietnam Gold Traders Association (VGTA). Since 2012, the Vietnamese government has held a tight grip on gold imports, only allowing select large firms to bring in the precious metal, provided it was repurposed as jewelry for export. But now, a change is glinting on the horizon.

The anticipation is palpable among gold traders. “The government hinted at a July or August start for official gold imports. We’re hopeful they’ll allow companies to import directly by then,” Khanh shared enthusiastically at the Asia Pacific Precious Metals conference. This decision, however, rests in the hands of the State Bank of Vietnam, the country’s central bank, which has yet to comment on the matter. Should this policy shift materialize, it would mark a dramatic departure from the existing regime, where the central bank meticulously controls gold imports, keeping a tight leash on the flow of bullion.

Despite efforts to narrow the gap between domestic and international gold prices through auctions and permitting four local banks to sell gold, the domestic market has remained stubbornly premium-laden. Khanh emphasized that addressing these premiums is critical, especially with the VGTA forecasting a surge in Vietnam’s gold demand this year. In fact, Khanh projected a 10% increase in gold purchases, reaching an impressive 33 million metric tons in just the first half of the year. Gold, in Vietnam’s bustling economy of around 100 million people, is more than just a commodity—it’s a fortress against economic volatility, particularly cherished by retail buyers.

But there’s a darker side to this golden narrative. The surging demand has spurred an alarming rise in gold smuggling, especially from neighboring Cambodia. “The underground network is vast. With prices so high, smuggling rates are through the roof,” Khanh warned. This urgent situation has propelled the VGTA and the World Gold Council to collaborate with the Vietnamese central bank and other government agencies on establishing a national gold exchange. Such a move, they believe, would usher in much-needed market stability, illuminating a path toward a more regulated and transparent gold market in Vietnam.

(Source: Forex Live | MSN)

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