Domestic gold traders are asking the central bank of Vietnam to set up gold bourses in the country through managing over-the-counter sales and a legal document on gold bourse operations.
The recommendation was released at the Vietnam Gold Trading Floor, From Global Practices to the Vietnamese Realm conference in HCM City last week.
Huynh Trung Khanh, vice chair of Vietnam Gold Traders Association, said gold trading in Vietnam is not in line with world markets.
‘The central bank should promote the liberalisation of the gold market in Vietnam to the world once domestic trading has boomed,” said Khanh.
The traders required Vietnam to have official over-the-counter sales managed by the State Bank of Vietnam, similar to the State Securities Commission’s rights over the stock exchange and securities trading centre.
At present Vietnam has the nine member Saigon Gold Trading Bourse in HCM City which includes ACB, Eximbank and Viet A bank.
Dong A Bank planned to open a gold trading bourse in May. The other banks of Eximbank, VPBank, Saigon Jewellery Company, Ha Thanh Securities Co will open another bourse in September.
“Once the number of gold trading bourses in Vietnam increases, the central bank should issue a legal corridor for the bourses to operate, such as an organisational mechanism,” said Khanh.
Once Vietnam’s market is connected to the world, it can develop other kinds of trading contracts such as forwarding, options and swaps instead of the current spot trading.
According to the Vietnam Gold Traders Association, the country consumed 43 tonnes of gold in the first quarter of this year, including 40 tonnes of imported gold.
The Saigon Gold Trading Bourse recorded transactions of 19 tonnes a day on average during the first quarter of this year, surpassing the record of the Shanghai gold exchange at 13 tonnes.
Albert Cheng, managing director of the World Gold Council Far East, said the council will work with the central bank to help liberalise the market.
“Local traders must be free in the import and export of gold as well as in the launching of other gold trading bourses, instead of just the one (we have now) so Vietnam can connect to world gold trading,” said Cheng.
The State Bank still puts limitations on gold traders, such as not allowing gold for export, putting quotas on gold imports and permitting only 20 banks and enterprises to trade gold in accounts. Local traders are also not allowed to open foreign currency accounts abroad.