In a significant policy shift, Vietnam is expected to allow companies to directly import gold for the first time in over a decade, according to an industry official. This move is aimed at bridging the widening gap between local gold prices and international benchmarks.
The Vietnam Gold Traders Association (VGTA) has been in prolonged discussions with the government regarding measures to correct the imbalance in gold supply and demand. Huynh Trung Khanh, the association’s vice chair, stated that the government has indicated it will start official gold imports by July or August, with the possibility of allowing gold companies to import directly as early as next month.
This proposed change marks a departure from the current policy, wherein the Vietnamese government has maintained tight control over gold imports and local bullion sales since 2012. Under the previous regime, only certain large companies were permitted to import gold, but they were required to repurpose it as jewelry for exports.
Attempts by the government to narrow the price gap, such as holding auctions and allowing four local banks to sell gold to increase liquidity, have largely failed to have a sustained impact, with domestic prices still trading at significantly higher premiums to global prices.
The VGTA expects the proposed policy shift to be crucial, as the association estimates Vietnam’s gold demand to surge by 10% on a yearly basis to 33 million metric tons during the first six months of this year. Retail buyers, who view gold as a wealth preservation tool, account for a significant portion of the purchases in the Southeast Asian economy.
The sharp increase in demand for gold has also led to higher levels of smuggling, especially from neighboring Cambodia, underscoring the need for immediate policy action. The VGTA and the World Gold Council are currently working with the Vietnamese central bank and other government agencies to establish a national gold exchange, which they believe will provide more market stability.
The move to allow companies to directly import gold is a significant step forward in Vietnam’s efforts to address the imbalance in the domestic gold market and align local prices with international benchmarks, catering to the growing appetite for the precious metal among Vietnamese consumers.