Gold market and encouraging signals in 2012

The pace of increase in gold prices has slowed down to 7.83% in 2012 compared to the annual rate 24% in years earlier, according to the data of the General Statistics Office .

This is an encouraging signal which would help restore market confidence and stabilize the macro-economy as the disparity between local and foreign markets has been narrowed, leading to a slight decrease in dollar price.

The signal was attributed to various reasons, including tamed inflation and shrinking consumer price index.

The declining gold prices in 2012 also stemmed from high deposit interest rates and effective management of the gold market and gold bars.

However, the disparity between local and foreign markets is still high as Viet Nam’s average gold prices sometimes closed at VND5 million per tael and remained there for long period of time.

To address the issue, the Government promulgated Decree 24/ND-CP dated April 3, 2012 to manage gold business activities in production and processing of gold jewellery and fine arts, purchase and sale of gold jewellery and fine arts, purchase and sale of gold bars among others.

The Foreign Currency Management Department under the State Bank of Viet Nam said that gold speculation has declined after the licensed gold bar market operated officially since January 10, 2013.

In Viet Nam, national gold reserve is modest. However, gold volume held by the public is estimated at 250-300 tons, equivalent to US$15 billion./.

By Kim Loan (VGP) 

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