While global gold prices are expected to surge strongly in 2013, local experts have yet to give any predictions for development of domestic gold prices as new rules on gold trading have just taken effect.
Most large banks worldwide such as Goldman Sachs, BNP Paribas, UBS and Bank of America have predicted the precious metal to shoot up to over US$1,800 an ounce this year, explaining that many countries, including the U.S., have loosened monetary policies.
Besides, central banks in these countries have a high demand for gold, seeing gold prices accelerating.
Meanwhile, Vietnam this year will tighten gold trading management given Decree 24. The central bank has also regulated that there will be connections between global and domestic prices.
Currently, domestic gold prices are up to VND5 million higher than the world prices for a tael but the central bank has no plans to import gold. A tael equals 1.2 troy ounces.
According to a leader of the central bank, this agency is considering allowing banks to temporarily export gold bars to re-import bullion to speed up gold quality evaluation process. This plan will be deployed soon to help banks secure gold liquidity and pay for customers.
Therefore, domestic gold prices will be unpredictable as they will fluctuate following administrative measures in stages, causing risks to gold keepers.
Nguyen Cong Tuong, deputy sales manager of Saigon Jewelry Company (SJC), said that these measures will help reduce gold demand, narrowing the gap between global and domestic gold prices. Investors have also offloaded a large amount of gold given concerns over a sudden decline in gold prices.
SJC has lowered buying prices given strong selling pressure over the past few days, widening the difference between gold buying and selling prices.
Concerning the 2013 outlook, Tuong said it is unlikely that people will reduce gold reserves after the number of gold sales points has declined.
In fact, people can keep gold in the form of jewelry or rings while gold shops can expand business by cooperating with qualified gold trading companies.
Tran Thanh Hai, general director of Vietnam Gold Investment and Trade Company, said gold prices could not be predicted until people’s reactions on January 10, when all gold bar trading activities at private gold shops will be stopped, are seen.
However, the bank restructuring scheme should begin soon to maintain belief in the banking system, control inflation and prevent dong devaluation. If this scheme is realized, people will convert gold into dong to service business and production activities, Hai said.
The Saigon Times Daily