Industry players are trying to get theirs heads around how to effectively control the local bullion market.
Vietnam Gold Business Association (VNBA) deputy chairman Dinh Nho Bang said with current foreign exchange management policies it would be hard to forecast domestic gold prices.
Meanwhile, senior expert Le Xuan Nghia assumed Decree 24/2012/ND-CP on gold bar trading management had yet to meet the main targets of reducing gold price difference in domestic and world market prices, lowering gold import and increasing gold mobilisation from the community to service economic development.
By contrast, the decree might bring high risk to the State Bank in case of big volatility in domestic and world market gold prices.
“To get control of the situation, the State Bank needs to consider abolishing current policy on gold import quota provision to shift into automatic-quota provision regime with regulated gold volumes and allow commercial banks to raise gold and operate account-based gold trading to balance market demands and avert risk,” Nghia said.
Echoing the idea, bullion trading firms said a number of illegal gold trading centres kept operating albeit a ban on their operation was in place more than two years ago. Hence, to avoid swindle cases as the recent $60 billion one in China central banks should shortly take acts like establishing national gold trading centre and giving nod to account-based gold trading.
“Founding national gold trading centre would be a smart option to shorten the gap in local and world market gold price. The centre must be controlled by the state with different gold codes as share codes and players being domestic and foreign investors. This would help stop gold smuggles while generating taxes to state coffers,” said senior gold expert Phan Dung Khanh.
In respect to gold price future perspective VNBA deputy chairman Nguyen Thanh Truc assumed the bullion price might climb to $1,800 per ounce this September and continue upward trend in later months of the year.
“The gold price may inch up to $2,000 per ounce by late year,” said Vietnam Gold Trading Centre general director Tran Thanh Hai.
Gold price strong upsurge is also what international financial entities have perceived. Accordingly, in July Deutsche Bank AG forecast the gold price might hit $2,000 per ounce in late 2012 whereas HSBC also put the gold price at $1,900 per ounce due to global economic uncertainties, escalating political tension, suspicions upon US election this November alongside central banks’ movement to enriching their gold reserves.