The strong selling burst from citizens after Decree 24 on gold trading management came into force last week has narrowed the gap between global and local gold prices.

Saigon Jewelry Holding Co. (SJC) on Sunday quoted gold prices at VND44.8 million per tael for buying and VND45.3 million per tael for selling, down VND500,000 against last Friday, the lowest levels since September 5 last year. A tael equals 1.2 troy ounces.

Meanwhile, in the global market, gold fell US$12 to US$1,662.7 per ounce. As such, the local gold price was only VND3 million a tael higher than the global level, a drop of nearly VND2 million from January 9.

However, trading at SJC headquarters and banks was closed at noon last Saturday. Those with demand for gold trading during the weekend could only go to SJC branches and outlets of the eligible companies in HCMC.

SJC deputy sales manager Nguyen Cong Tuong attributed the narrower gap between local and global gold prices to the strong selling energy of citizens in the past few days. From last Thursday to Saturday, SJC mainly bought gold.

The situation was the same at other gold trading points. Tuong said citizens were worried that gold prices would keep falling when the market was narrowed and strictly controlled by the central bank.

The fact that the number of gold trading points has been reduced has led to an increase in supply and narrowed the local-global gold price difference. Banks are now relieved of the gold liquidity pressure thanks to the strong sale of citizens as well as the volume they had bought previously.

With a decision on temporary export of gold bars and re-import of gold bullion to be approved soon, banks will not need to buy more gold. Therefore, in the coming time, the local gold prices will likely closely follow the global prices.

The central bank has said it would join the gold market as an ultimate trader in a bid to stabilize the market in accordance with the spirit of Decree 24.

The Saigon Times Daily