A golden bullion trend

January 30, 2013 | 14:26
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The bullion market has been fairly stable two weeks after gold bar transactions were restricted only to licenced businesses under Decree 24/2012/ND-CP. State Bank Ho Chi Minh City branch office deputy director Nguyen Hoang Minh shines further light on the issue.

How is gold bar trading going at banks and businesses after gold bar trading was restricted to only licenced points from early 2013?

There was no volatility in the bullion market during the period. Gold bar supply and demand relations were almost balanced.

In fact, unlicenced shops reportedly continue to trade in gold bars ‘silently’ flouting the regulations. What sanction measures are there?

At first, unlicenced businesses which were found guilty will receive a warning. If they repeat the fault, they will incur sanctions as regulated by law.

It will be very risky if unlicenced gold shops continue to perform gold bar trading and customers deliberately make transactions at these shops as the violators will incur severe penalty if their acts were detected by competent forces.

From January 10, 2013 gold bar trading was treated as foreign currencies’ trading, so when carrying transactions the buyers should require the gold shops or banks to issue invoices bearing their gold bar series to avert risk.

Some people assumed around 2,500 licenced points across the country could not sufficiently handle the service. What’s your view?

These nearly 2,500 units could basically meet people’s demands for gold bar transactions. The State Bank  will consider granting further licences to businesses coming up to par. Hence, there is needless to concern over lack of licensed gold bar trading points.

Banks as well as businesses getting licenses have expansive operation network nationwide. Besides, we asked banks and licensed businesses to unveil their status through posting boards on [gold bar trading service] provision, making it easy for the customers when they have demand.

In fact, the gap between domestic and world market gold price remains big at around VND4 million ($1,900) per tael after gold market recent move. Will the gap be narrowing in the future?

This gap was in fact narrowing in first days with restricted gold bar transactions. It is being widened then, but the State Bank  is keeping close eyes on what happens in the domestic gold bullion market.

Divergences in domestic and gold market prices are an issue of concerns. However, in a recent banking sector review meeting the State Bank  voiced its commitment to closely controlling gold bar trading in the near term. This will help keep the gold market stabile, paving the way to gradually shorten the price gap.

Could SJC gold bar monopoly and gold bar licensing lead to speculative acts by banks?

It is unlikely as commercial banks’ gold status is regulated (2 per cent) and everyday banks ought to report on their gold status to the State Bank  later on the day.

By Thuy Vinh


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