HANOI(BullionStreet): Days after Vietnam's central bank, The State Bank of Vietnam (SBV) said it will intervene in the local gold market to curb the rising disparity between local and global gold prices, analysts said investment demand for gold in Vietnam heads for a decline this year.

They said investment demand, which contributes about 85 percent of total gold demand in the world's No.9 bullion consumer, is expected to fall 22 to 25 percent in 2013.

Earlier in the week, the SBV and Saigon Jewellry Company ( SJC) signed a principle contract under which the SJC will use SBV's gold reserves to make national SJC-brand gold bars so as the SBV can trade them on the market.

Doing this, the SBV could regulate local gold trading with prices following the global trend, said the central bank official.

During the last two years, the SBV did not allow gold imports to limit trade deficit and curb inflation, which lead to shortage of raw gold for the production of SJC-brand gold bars.

The central bank allowed some major banks to temporarily export non-SJC gold, then import gold for production of the SJC-brand gold bars in Vietnam.

As of Feb. 26, the Dong A Bank reported it was allowed to temporarily export-then import 600 kg of gold and it will do with another 500 kg on Feb. 28.

The SBV is preparing all necessary steps so as it can join the local gold trading soon. SBV will work as a gold trader, selling gold through a bidding form to other clients who join the market, with the aim of making domestic gold prices keeping en march to the global ones.

The SBV plans to hold the first bidding session this week, along with changing nine tons of non-SJC gold into SJC-brand gold, which will provide an abundant amount to the market.