Many gold trading firms have suggested the State Bank of Vietnam (SBV) to soon issue license for importing gold from abroad, General Director of Sacombank Jewelry Company (SBJ) To Thanh Hiep told Hanoitimes.

Customers buying gold at a store in Tran Nhan Tong street, Hanoi. Photo: Thanh Hai

 Hiep attributed limited gold supply in the domestic market to the huge difference in prices, making investment in gold to be a high-risk trading for local investors.

A huge difference at present between the domestic and international gold prices of nearly VND8 million (US$347) per tael is the biggest gap in recent years.

“Since the government decree No.24/2012 on gold market management, there has been no companies authorized to import gold materials for domestic jewelry manufacturing,” said Hiep, adding the supply mainly comes from within the market.

“Vietnamese people are overpaying to own a same amount of gold as their international peers,” said economist Tran Thanh Hai.

Gold prices in the global market this morning [March 1] rose by US$8 per ounce to US$1,743.7, or nearly VND50 million (US$2,171) per tael, marking the precious metal’s first increase in price after declines of a combined US$100 per ounce in three consecutive trading sessions last week.

Following a decrease of VND300,000 (US$13) per tael last week, the domestic gold prices returned to the upward trend by with a rise of VND150,000 (US$6.5) per tael, as state-owned Saigon Jewelry Company (SJC), the country’s largest gold and gold jewelry production and distribution company, quoted its buying-selling prices of VND55.95-56.35 million (US$2,429-2,439) per tael.

Experts from the Vietnam Gold Traders Association (VGTA) have also recommended that the central bank relax state policies in this regard, so that local traders could import gold to meet the market demand.

To further narrow the gap between prices of gold in Vietnam and international market, the VGTA experts have suggested the establishment of a national gold trading exchange center to stabilize gold prices.

Lawyer Truong Thanh Duc, chairman of the BASICO Law firm, said there are no laws to address the difference in gold prices at present.

“Gold trading is a conditional business field, and therefore not under the list of goods subjects to price stabilization by the state,” he added, saying the fluctuation of gold prices is dependent on market demand.

“There is no linkage between the domestic and international gold prices, so local firms are the ones to decide on that. This is the risk that gold buyers have to bear,” Duc stated.