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Vietnam: SBV to cool domestic gold market, governor says DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Vietnam: SBV to cool domestic gold market, governor says

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Vietnam: SBV to cool domestic gold market, governor says Empty Vietnam: SBV to cool domestic gold market, governor says

Post by ADMIN Thu Aug 25, 2011 7:03 am

SBV to cool domestic gold market, governor says

VietFinanceNews.com - The State Bank of Vietnam (SBV) will issue measures to cool the gold market, which has been highly volatile this year, governor Nguyen Van Binh says at a conference on Tuesday.


To stabilize local gold price, the state bank will give green light to gold import with “necessary amounts”, Binh says.


The state bank will also design appropriate mechanisms that enable credit institutes to “initially use the available amount of gold” to cool local market, he says.


Binh says the state bank earlier approved an import quota of five tons of gold this year.


Statistics show three tons of gold have been imported so far


The state bank has finished setting up a decree on supervising gold trading, which is set to submit to the government next month, the governor says at the conference.


Under the decree, the state bank will be in charge of either granting license to produce gold bars or becoming a gold producer.


The state bank will also allow some enterprises and credit institutes, which are experienced gold traders, to trade gold bars in an effort to closely supervise domestic gold trading.


Figures from the central bank show there are around 300-500 tons of gold trading on the local market.


Banks earlier hold more than half of the amount as they were allowed to mobilize, loan and convert gold into dong amid the surging price of the precious metal.


The state bank then gradually stopped lenders’ gold loans, which carried high risk of losses.


Yet the ban is still inadequate, Binh says.


“If we just allow lenders to mobilize gold and ban them from loaning out, it will be a waste and they will definitely find some illegal ways to trade the gold deposits,” he says.


The state bank plans to encourage residents to deposit their gold into lenders, Binh says.


He expects that the amount raised from individuals can reach to around 130 tons worth $10 billion - an equivalent of the amount that has been deposited by individuals earlier.


Vietnam’s gold is fluctuating wildly on the soaring global price, Binh says at the conference on Tuesday.


“Precious metal on the local market is mainly imported from abroad as Vietnam has no big gold mine,” Binh says.


“Therefore the state bank will manage to keep domestic gold catching up with the international price with an appropriate trading band.”

The governor warns that a large band will cause a strong speculation on the yellow metal. He also notices, to curb speculation, the domestic price should only be higher than the global one by VND400,000 per tael (US$20) or less.


One tael is equivalent to 37.5 grams or 1.21 troy ounce.


Gold in Hong Kong on Tuesday moved up to $1,916 per ounce before retreating to close at $1,877 per ounce as investors consider the precious metal as safe haven during the economic meltdown.

On the same day, gold at retail shops in Ho Chi Minh City rose by VND450,000 to VND49 million per tael – higher than the international price by more than VND1 million per tael.

http://www.vietfinancenews.com/2011/08/sbv-to-cool-domestic-gold-market-says.html

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Vietnam: SBV to cool domestic gold market, governor says Empty Re: Vietnam: SBV to cool domestic gold market, governor says

Post by ADMIN Thu Aug 25, 2011 7:08 am

Vietnam to tighten controls on gold trading activity

VietFinanceNews.com - The State Bank of Vietnam (SBV) has said it will pass to the Government in September a draft decree that would make SBV the nation’s only licensing authority for gold bar traders, thus strengthening controls on trading of the yellow metal.



The central bank said the principle is gold bar trading should be put under tighter control. So if the draft decree is approved, the central bank will have gold bars produced or license other organizations to make them to meet market demand.


Regarding the circulation of gold bars, the central bank will allow a few experienced traders and credit institutions to make gold bar transactions with organizations and individuals to facilitate management of this business. The central bank will also arrange gold ingot export operations and take charge of the gold export licensing job.


Following its consultations with industry associations about policy for gold jewelry production and processing, the central bank said its local branches would issue business qualification certificates for gold jewelry processing firms. As for individual and household businesses, obtaining a business registration certificate will be a must.


Organizations and individuals wishing to open a gold jewelry business must establish companies and satisfy the conditions that are already set out in the draft decree but do not need to ask for business qualification certificates.


With this operation orientation, the central bank will directly engage in management of gold bar production, circulation and trading, as well as gold material import and export. This way is expected to help SBV intervene in the gold market and control speculation.

The global gold price shot up from US$1,494 on July 1 to US$1,900 an ounce on Tuesday. This price spike is ascribed to the public debt crisis in Europe and the faltering U.S. economy.


Notably, global gold has surged strongly since Standard & Poor’s (S&P) downgraded the U.S. public debt. In line with the world market movements, the price of the yellow metal in Vietnam has also turned volatile.


Therefore, to calm down the public and stabilize the local market, SBV on August 9 issued gold import quotas for some enterprises and credit institutions, which must supply gold to thwart any undersupply to help narrow the difference between global and local prices.


SBV said it would consider responding to the call for mobilization of gold from local sources to help stabilize the market, along with timely gold import to curb speculation. In HCMC, as of end-June, around 2.4 million taels of gold had been deposited at banks.

http://www.vietfinancenews.com/2011/08/vietnam-to-tighten-controls-on-gold.html

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