VietNamNet Bridge – The State Bank of Vietnam (SBV) will give approval to enterprises to import material gold to serve production of jewelries and gold artworks, the central bank said in a report reviewing the gold market in the first half of this year.

Customers transact jewelries at a shop in HCMC. Enterprises will be allowed to import material gold for jewelry production in the coming time.

To meet the demand for jewelries of local people and reduce pressure on the gold bar market, the central bank is looking at gold import applications of jewelry firms to give them import licenses. SBV has told these enterprises to use imported material gold in the right purpose.

Pursuant to Decree 24/2012/ND-CP, licenses for gold imports for jewelry and gold artwork production will be considered by the central bank after taking into consideration gold supply and demand from time to time.

Dinh Nho Bang, vice chairman of the Vietnam Gold Business Association, said that the association has submitted proposals on material gold import twice. Local enterprises are now buying materials at home at high prices without clear origins, pushing up production costs and thus eroding their export competitiveness.

With material import approval, enterprises will be able to reduce costs and secure origins of material supplies. This will be a new step as enterprises have yet to get approval for material gold imports over the past years.

According to the association, Vietnamese 20k, 22k and 24k jewelries are popular in countries like Turkey, Dubai and China. Therefore, the Ministry of Finance should lower export taxes to encourage exporters.

The ministry has fielded suggestions of the association on reducing export tax on jewelry products with gold purity from 80% to 99% from 10% to 0% as suggested by enterprises, Bang said.

Enterprises earlier bemoaned low jewelry consumption in the country given economic slowdown.

Besides, other countries in the region have cut taxes on exports of jewelry and gold artworks to 0%, helping their jewelry industry fetch high export revenues. For instance, Thailand earns around US$3 billion in jewelry export value every year.

Therefore, jewelry production firms may enjoy more favorable conditions in business and export activities this year once gold imports for domestic jewelry production is resumed.

* After hitting VND39 million per tael last weekend, gold prices in the local market on Monday tumbled VND450,000 a tael following the global trend.

Saigon Jewelry Holding Co. on Monday quoted the precious metal at VND38.55 million per tael for buying and VND38.85 million a tael for selling. At other gold trading firms, prices fluctuated around these levels.

Gold purchasing power weakened on Monday. Phu Nhuan Jewelry Co. (PNJ) sold about 700 taels, down by a half against the preceding day.

Nguyen Ngoc Trong, sales director of PNJ, explained that many people had bought gold at the weekend, so demand was low now. Similarly, selling energy was mild.

Another gold auction will be held today, with nearly one ton put up for sale. The reference price for making deposits is VND38.65 million per tael, some VND100,000 higher than buying prices quoted by gold traders.

The State Bank of Vietnam (SBV) continues to supply gold to the market although the volume sold so far is already higher than initially planned.

Banks still need an additional four tons to repay depositors. However, it does not mean SBV will auction exactly this amount, but it may put up a higher volume for sale because many banks and enterprises have sold the gold they bought via auctions.

SBV Governor Nguyen Van Binh said the central bank had gained VND3 trillion from gold auctions in the past three years and paid it into the State budget.

In a report on the gold market in the year’s first half and solutions for the second half, SBV said that when the demand for gold among banks declined and the market achieved stability, it would only intervene when necessary.

In addition, the central bank will buy gold to increase the foreign exchange reserve. It will also seek measures to mobilize gold and guarantee dong value and the macro-economy.

The global gold price dipped US$14.3 to US$1,284 per ounce at 6 p.m. on Monday. The gap between local and global gold prices remained wide at VND6.3 million per tael.

Source: SGT