Vietnamese advised to exercise caution when trading gold

The State Bank of Vietnam has advised people to exercise caution and only buy and sell gold at authorized establishments to avoid risks amid price hikes.

Gold bar on sale at a store

The central bank’s office in HCMC said in a recent notice that trading the precious metal without a license is illegal and could lead to penalties for both buyers and sellers.

It urged the public to follow the law to help stabilize the market and curb speculation and price manipulation.

It reminded businesses to comply with regulations regarding licenses, certificates of eligibility for production, facilities, invoices and documents, product origin and quality, and public price listings.

Such compliance reduces the risks of counterfeiting, smuggling and tax evasion, it said.

In recent weeks gold prices in Vietnam have repeatedly hit new peaks to now exceed VND135 million (US$5,111) per tael of 37.5 grams or 1.2 ounces.

Local prices have climbed 60% so far this year and are VND20 million per tael higher than global rates, which have risen at a slower pace of 37% in the same period.

The central bank attributed the surge in local prices to limited supply and higher demand.

The bank has temporarily stopped selling gold bullion to businesses as it is transitioning to a new management policy that will end the government monopoly on gold bar production, it said.

This has strained supply, as businesses typically keep low inventories due to high costs, it pointed out.

Meanwhile, there has been an almighty scramble to buy gold in expectations of further price hikes, driving up demand.

The central bank has just wrapped up inspections of gold trading businesses.

Its deputy governor, Doan Thai Son, said it is speeding up the task to stabilize prices.

Source: VNE