State Bank: High gold prices do not equate to shortage

October 06, 2010 | 10:48

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The State Bank emphasised that there is no shortage of gold at present and it’s not the right time to import gold.

Domestic gold supply is abundant

Local gold prices have hit record highs of over VND3.13 million (USD156) per tael which is VND50,000 (USD2.5) higher than the world’s gold price.

According to Governor of the State Bank, Nguyen Van Giau, the current record increase of global gold prices are an unpredictable situation.

“During the past 3 days, the domestic gold market has fluctuated. However, according to member enterprises of the market, Vietnam does not need to worry about a shortage of gold. The demand of gold is at a normal level, even there was no deal made when the domestic gold price hit a record high,” emphasised Giau.

Giau also added that the current increase in gold price was probably only speculation. The State Bank and market management agency will determine the cause.

It’s not the right time to import gold. “Gold is not an essential need of the nation. The difference of gold price in domestic and international markets is unstable. Why should we import gold at this time? It’s impossible to do this without thorough consideration because it can alter economic stability,” said Giau.

Regarding the potential increase in deposit rates of gold, Giau said that there were very few countries having these kind of deposit rates. Currently, the total balance of gold deposits is equivalent to VND95 trillion (USD4.75 billion).

The interest rates of gold may go up again and its current rates are 1.5%. This means there was a high demand of borrowing gold. The State Bank has requested commercial banks to report the total amount of gold loaned from the beginning of September to date. In the future, this product will be controlled.

On the afternoon of September 29, the domestic gold price slid down over VND10,000 per tael compared with the record high price of VND3.138 million per tael at 2.10pm of the same day. There were few transactions in the market.

In Hanoi, Hanoi SJC Joint Stock Company announced its gold was bought at VND3.115 million per tael and was sold at VND3.123 million per tael.

The gold was bought at VND3.114 million per tael and was sold at VND3.126 million per tael at Bao Tin Minh Chau Company. The selling price went down VND12,000 per tael compared with the record high price at 2.10pm of the same day.

In Ho Chi Minh City, SJC gold was bought at VND3.112 million per tael and was sold at VND3.125 million per tael.

The SBJ gold of Sacombank-SBJ was bought at VND3.114 million per tael and was sold at VND3.120 million per tael.

Gold trading enterprises had to change their product prices 15 times within the day.
At such prices, not many civilians are interested in buying gold and investors are very cautious with their gold investment decisions.

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