The State Bank of Vietnam (SBV) has said it will pass to the government in September a draft decree that would make SBV the nation’s only licensing authority for gold bar traders, thus strengthening controls on trading of the yellow metal.
The central bank said the principle is gold bar trading should be put under tighter control. So if the draft decree is approved, the central bank will have gold bars produced or license other organisations to make them to meet market demand.
Regarding the circulation of gold bars, the central bank will allow a few experienced traders and credit institutions to make gold bar transactions with organisations and individuals to facilitate management of this business. The central bank will also arrange gold ingot export operations and take charge of the gold export licensing job.
Following its consultations with industry associations about policy for gold jewellery production and processing, the central bank said its local branches would issue business qualification certificates for gold jewellery processing firms. As for individual and household businesses, obtaining a business registration certificate will be a must.
Organisations and individuals wishing to open a gold jewellery business must establish companies and satisfy the conditions that are already set out in the draft decree but do not need to ask for business qualification certificates.
With this operation orientation, the central bank will directly engage in management of gold bar production, circulation and trading, as well as gold material import and export. This way is expected to help SBV intervene in the gold market and control speculation.
The global gold price shot up from $1,494 on July 1 to $1,900 an ounce on Tuesday. This price spike is ascribed to the public debt crisis in Europe and the faltering US economy.
Notably, global gold has surged strongly since Standard & Poor’s (S&P) downgraded the US public debt. In line with the world market movements, the price of the yellow metal in Vietnam has also turned volatile.
Therefore, to calm down the public and stabilise the local market, SBV on August 9 issued gold import quotas for some enterprises and credit institutions, which must supply gold to thwart any undersupply to help narrow the difference between global and local prices.
SBV said it would consider responding to the call for mobilisation of gold from local sources to help stabilise the market, along with timely gold import to curb speculation. In HCM City, as of end-June, around 2.4 million taels of gold had been deposited at banks.