Gold market to have new big supply
VietNamNet Bridge – The State Bank of Vietnam has authorized the SaigonJewelry Company (SJC) to make bullion gold to provide to the market. Decliningto say about the amount of gold to be made, but a representative of the centralbank said a big amount would be marketed to help stabilize the prices.
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In an official statement released on March 20, the State Bank affirmed that SJChas been officially assigned the task of make bullion gold. With the SJC’scapacity of 80,000 taels (3 tons) per day, the supply would exceed the demand ina short time, which would help narrow the gap between the domestic and theworld’s prices, according to Dau tu.
The State Bank has affirmed that the move, plus the other factors, such as thestable dong/dollar exchange rate and the downward in the world’s prices, allwill help curb the domestic prices and ensure the reasonable price gap.
Le Hung Dung, President of SJC, has confirmed that SJC is making bullion goldfor the State Bank, but has declined to reveal the amount of gold to process.Meanwhile, analysts have estimated that SJC has put out more than 10 tons ofgold over the last week. As such, the amount of gold to be churned out by SJCmay reach 20-30 tons by the time when the State Bank officially organizesbullion gold auctions.
Dinh Nho Bang, Deputy Chair and Secretary General of the Vietnam Gold BusinessCouncil, said on Dau tu that previously, Vietnam imported some 30 tons of gold ayear. However, not the whole amount of 30 tons was converted into bullion goldand consumed domestically. It was estimated that 1/3 of the amount was used tomake jewelries. Besides, a big volume of the imports was re-exported.
As such, Bang said, the market would see the excessive supply if State Bank justmarkets 10-20 tons of bullion gold.
Infonet has quoted its sources as saying that the first gold auction may beorganized this week at the soonest, or in late April.
A senior executive of a big gold trade company in Hanoi said his enterprise islooking forward for the first auction.
“Under the current regulations, the State Bank would send a notice about theauction one day in advance. We are really expecting the auction which we hopewould help warm up the market,” he said.
It’s still unclear when the auction would be organized this week, but a sourcesaid the auction would not be organized on Friday, because the prices fluctuateheavily at the end of weeks, while the world’s opening and closing time does notcoincide with the Hanoi’s time.
Analysts put a high hope on the gold auctioning, believing that once a bigvolume of gold is marketed, this would immediately cool the market down andnarrow the gap between the domestic and the world prices.
However, they are not sure if this should be the long term measure for the goldmarket control.
The price gap existing for the last long time is believed to be caused not bythe supply-demand imbalance, but because of the speculation. Therefore, thesupply increase would not help settle the problem to the every root.
Bang thinks that this should be seen as a temporary solution only, while in thelong term, the State Bank should allow to trade gold on accounts to ease thedemand for in-kind gold.
The State Bank has affirmed that the move, plus the other factors, such as thestable dong/dollar exchange rate and the downward in the world’s prices, allwill help curb the domestic prices and ensure the reasonable price gap.
Le Hung Dung, President of SJC, has confirmed that SJC is making bullion goldfor the State Bank, but has declined to reveal the amount of gold to process.Meanwhile, analysts have estimated that SJC has put out more than 10 tons ofgold over the last week. As such, the amount of gold to be churned out by SJCmay reach 20-30 tons by the time when the State Bank officially organizesbullion gold auctions.
Dinh Nho Bang, Deputy Chair and Secretary General of the Vietnam Gold BusinessCouncil, said on Dau tu that previously, Vietnam imported some 30 tons of gold ayear. However, not the whole amount of 30 tons was converted into bullion goldand consumed domestically. It was estimated that 1/3 of the amount was used tomake jewelries. Besides, a big volume of the imports was re-exported.
As such, Bang said, the market would see the excessive supply if State Bank justmarkets 10-20 tons of bullion gold.
Infonet has quoted its sources as saying that the first gold auction may beorganized this week at the soonest, or in late April.
A senior executive of a big gold trade company in Hanoi said his enterprise islooking forward for the first auction.
“Under the current regulations, the State Bank would send a notice about theauction one day in advance. We are really expecting the auction which we hopewould help warm up the market,” he said.
It’s still unclear when the auction would be organized this week, but a sourcesaid the auction would not be organized on Friday, because the prices fluctuateheavily at the end of weeks, while the world’s opening and closing time does notcoincide with the Hanoi’s time.
Analysts put a high hope on the gold auctioning, believing that once a bigvolume of gold is marketed, this would immediately cool the market down andnarrow the gap between the domestic and the world prices.
However, they are not sure if this should be the long term measure for the goldmarket control.
The price gap existing for the last long time is believed to be caused not bythe supply-demand imbalance, but because of the speculation. Therefore, thesupply increase would not help settle the problem to the every root.
Bang thinks that this should be seen as a temporary solution only, while in thelong term, the State Bank should allow to trade gold on accounts to ease thedemand for in-kind gold.
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