|Consumers rush to buy gold|
Around two to three tons of gold will be imported to Viet Nam on April 21. The imported precious metal will swell to 14 tons in late-April, announced gold traders in Ho Chi Minh City on April 20.
One ton of gold is equal to 26,600 taels and with the production capacity of around 6,000 to 7,000 taels a day, the gold supply will soon surpass the current domestic demand.
If the world gold price is around US$645 an ounce, it would be equal to the real value of Viet Nam’s selling price of around VND12.4 million to VND12.5 million a tael. Domestic price, jumping by VND1 million a tael a day, is mainly attributed to the normal behavior of customers at the abnormal fluctuation of gold price in recent days.
Many gold dealers could not import the metal on April 19 despite a quota that allows a limited import of gold. Foreign dealers could not process solid gold into the ingots in a short time to meet the rising demand of Vietnamese dealers. Plus, the processe takes longer time and costly, and it can slow down the delivery in Viet Nam.
It does not make sense if only gold ingots could be imported to Viet Nam instead of the solid metals. The government reduced tariff on solid gold while traders only have quota on gold ingots. Thus, most of metal imported to Viet Nam are ingots and have higher taxation.
If the government had allowed dealers to import solid gold, there would have been neither severe shortage of gold nor gold fever, said a dealer.
Viet Nam Gold Traders Association, three months ago, sent a report to the Prime Minister asking for the lifting of the restrictions. One more report has been submitted to the government amid the fluctuation of gold price in the recent days. And, a representative of the Ministry of Finance replied that the official acceptance would be released in early June, 2006.
The global price is predicted to continue its volatility, leading to the erratic behaviors of the domestic price. It is high time to revoke the irrational regulation; otherwise it would affect the stability of gold market in Viet Nam?
Gold Price Made Unprecedented Record: VND14 Million per Tael
Continuing to increase and decrease erratically, gold price hit a record high on April 20.
In Ha Noi, Bao Tin-Minh Chau Gold and Gem Company’s 9999 gold was traded at VND14.15 million a tael at 11AM, April 20, an increase of VND1.2 million in comparison with the previous day’s closing price. The 9999 gold price on the free market exceeded VND14 million a tael in the same morning. Meanwhile, gold was traded at only VND13.57 million a tael at the Viet Nam Jewelry Company under the Viet Nam Bank for Agriculture and Rural Development.
People were still rushing to buy gold despite of the volatile gold prices. Big jewelry companies in Ha Noi all did transactions on paper and invoice; customers would come back to receive gold after one or two days.
The number of gold buyers was dwindling in the afternoon. And the gold price dropped a little towards the end of the day. Bao Tin-Minh Chau Company’s 9999 gold was traded at VND13.9 million a tael at 5 PM, while the gold price of the Viet Nam Jewelry Company was VND13.52 million. The 9999 gold price on the free market fluctuated from VND13.7 to 13.9 million a tael before the closing time.
The SJC gold price stayed at VND14 million per tael at the opening time in Ho Chi Minh City. The price reduced to VND13.6 million at the closing time, but it was still VND600,000 higher than that of April 19.
The gold price was pushed up on April 20 probably not because of rising demand and gold shortage of the previous day, but more due to the world's gold price shooting up US$22 an ounce within the day, an unprecedented record increase which pushed the global gold price up to US$648 an ounce.
In fact, with the current gold price, the value of gold in Viet Nam is exceeding its real value, comapared with the global price.
To avoid the gold shortage, many companies fix a price; customers pay in advance and receive gold later. The Phu Nhuan Jewelry Joint Stock Company (PNJ) traded 1,800 taels using this transaction mode on April 20.