Gold Transactions in Vietnam Plunge as Yellow Metal Loses Appeal

Tuan Minh

15:53 13/09/2017

BizLIVE - Gold is losing its appeal in Vietnam thanks to the central bank’s crackdown on local holdings.

Gold Transactions in Vietnam Plunge as Yellow Metal Loses Appeal

Gold is losing shine in Vietnam.

The transaction volume of gold bars in Vietnam is currently hovering around 10,000 taels per day, sinking 75% from early 2013 as local appetite for the precious metal has been on the decline, VnEconomy cited data from the State Bank of Vietnam's foreign exchange department as saying.
The local gold market saw a dramatic change in early 2013 when the central bank requested credit institutions in the country to stop mobilizing and lending gold. This policy has been in place since then and banks now provide custody services to gold holdings instead.
Data from the central bank also showed the volume of gold under custody has been decreasing sharply since the start of 2013, standing at 2.89 tons as of June 2017 from 160 tons in 2012.
According to monetary authorities, the fall in the gold deposits is attributable to locals selling gold for local currency to reinvest in production, business and consumption.
Given lower demand for gold, the Vietnamese central bank has not had to import any gold bar since 2013.
SJC-branded gold, which is backed by the State Bank of Vietnam, was trading at around 36.56 million-36.76 million dong ($1,610-$1,619) per tael for buying and selling this morning, respectively, little changed from yesterday.
The spread between Vietnamese and global gold prices is standing at 100,000 dong ($4.7) per tael, shrinking significantly from millions of dong previously.