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Vietnam Accepts New Gold Bullion Imports

VIETNAM today granted import licenses for Gold Bullion for the first time since February, easing the south-east Asian economy's tight physical supply amid fears of a sharp decline in the Dong currency.

Gold Bullion import licenses for between 200kg and 300kg were issued to a handful of companies by the State Bank in Hanoi, Reuters reports, with the avowed aim of "stabilizing" the domestic market.

This should have a "positive psychological effect" on Vietnamese Gold Prices – currently pushing $20 per ounce above the London Spot Gold benchmark – reckons Nguyen Thi Cuc, deputy director of the Phu Nhuan Jewelry Co.

Even so, "People are going to focus on the fact that Asian physical market will be tight," said a Singapore Gold Dealer to Reuters last night.

"Last time Vietnam opened the door to gold imports, Spot Gold Prices went up $20. In percentage term, it could translate into $30 today."

Besides banning gold imports at the start of 2010, the State Bank also ordered Vietnam's $1bn-per-day Gold Trading exchanges to close, as a series of devaluations in the Dong currency spurred a flight into bullion by domestic savers and investors.

Three devaluations over nine months took the Dong some 5% lower by August, with a further 3% drop in its Dollar-value since then.

Hanoi's socialist government faces "embedded expectation of a declining trend in the Dong," said the International Monetary Fund's local representative, Benedict Bingham, in Sept., because of its huge trade deficit.

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