Tuesday, April 30th 03:07 PM IST

Gold smuggling thrives in Vietnam

# Vietnam gold  # SBV  # SJC  # gold monopoly  

Analysts said more smuggled gold will flow into the country if the global-local gold price gap widens further.

HANOI(BullionStreet): Ever increasing price gap between local and global gold prices remained the major reason for the highly inflow of smuggled gold in Vietnam.

Analysts said more smuggled gold will flow into the country if the global-local gold price gap widens further.

They added that smuggled gold, after arriving in the nation, is sold to enterprises as gold materials.

These companies will process smuggled gold into thin bars and jewelry to sell them in the market as they are disallowed to sell gold bars bearing SJC brand or others while gold bar moulds are managed by SBV.

Smuggled gold volume available in the local market therefore is not large, they said.

Vietnam gold prices surpassed global prices by up to VND6.4 million a tael this week. That is because global prices fell by a staggering $13 against the closing price in the New York market while local prices only posted a mild reduction of VND10,000 a tael.

Meanwhile, the 26,000 taels of gold that the central bank put up for sale via on Tuesday morning’s auction all found buyers.A tael equals 1.2 troy ounces.

The floor bidding price set by the central bank is VND41.97 million a tael, VND150,000 a tael higher than the opening buying price of SJC. The lowest winning price is VND42.04 million a tael and the highest VND42.12 million.

As such, the central bank since March 28 has sold out a combined 11.2 tons of gold via auctions, with most of buyers being commercial banks in need of gold for arrears settlement.

SBV will conduct two more gold auctions this week as the monetary authority plans to continue doing the job until local banks have no appetite for the precious metal.

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