The price of gold on the local market has risen due to possible speculation rather than a supply shortage, according to Nguyen Van Giau, governor of the State Bank of Vietnam (SBV).
The global gold price set new records in the past few days, as did the domestic gold market.
The SBV and the Vietnam Gold Association had kept a close watch on the market in the last few days, and discovered there was no shortage of gold, Giau said, adding that speculation was possibly the cause for the price rise.
Domestic gold prices in August and the first half of September were lower than the world price. But currently the domestic price is VND400,000 per tael higher than the global price.
The SBV was working with other agencies, including the police and market management, to discover the reasons behind the price hikes.
"With this kind of sensitive item, our policy is not to completely ban gold imports, but gold companies are not permitted to import any volume they want," Giau said.
"We are establishing a management framework for gold trading and imports so that it is suitable with a market economy. We will collect ideas from ministries and industries when we complete it."
Nguyen The Hung, general director of the Vietnam Gold Investment and Trading Co, said the gold price on the domestic market would be equal or even lower than the world price if the SBV permitted gold importers to import gold.
However, the government has stopped granting permits for gold imports, which indicates that it no longer considers gold an essential item, according to an expert.
In addition, the higher gold price had not affected people's lives since few people conducted their transactions in gold, he said.
The gold price on the domestic market on Thursday morning fell to VND31.15 million (US$1,597) per tael (1.2 ounces) after it reached a record of more than VND31.3 million ($1,605 USD) per tael on Wednesday, following an upward trend in global gold prices.
On Thursday morning, SBJ gold was also bought and sold at VND31.15 million ($1,597) and VND31.18 million ($1,599) per tael, respectively.
Sai Gon Jewelry Holding Co on the same day bought the precious metal at VND31.14 million and sold it at VND31.18 million VND per tael, a reduction of 130,000 – 170,000 VND against Wednesday.
Most gold shops in Ho Chi Minh City Wednesday raised their price by more than VND700,000 ($21.3) over the previous day’s price to VND31.25-31.36 million per tael.
The global gold price on that day reached an all-time high of $1,313 an ounce on speculation that a global economic recovery would stoke inflation. In Asia, the metal slightly fell to $1,309 an ounce in the morning.
The weakening of the US dollar on the world market has also contributed to the gold price hike, analysts have said.
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