VietNamNet Bridge – More smuggled gold has been launched onto the local market due to the widening gap between local and global gold prices in recent times, heard a meeting between the HCMC branch of the State Bank of Vietnam (SBV) and related agencies in the city on Monday.

Declining to elaborate on the smuggled gold quantity that has been found and detained, a source from the meeting told the Daily that the volume detected recently is not as large as in previous years but has increased gradually. More smuggled gold will flow into the country if the global-local gold price gap widens further, the source predicts.

According to members attending the meeting, 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.

However, the participants also sought solutions to prevent smuggled gold including supervising border gates and jewelry makers. Also, they suggested checking the quality of gold bars for sale at home.

Local gold prices surpassed global prices by up to VND6.4 million a tael on Tuesday afternoon. That is because global prices fell by a staggering US$13 against the closing price in the New York market on Monday to US$1,413.3 an ounce on Tuesday, while local prices only posted a mild reduction of VND10,000 a tael. A tael equals 1.2 troy ounces.

The 26,000 taels of gold that the central bank put up for sale via on Tuesday morning’s auction all found buyers. 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.

There will be 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.

The U.S. dollar price still remained high in the unofficial market and at local lenders on Tuesday, with VND21,400 recorded in the free market, a mild decrease of VND50 from 24 hours earlier.

The greenback quoted at local banks still fluctuated between VND20,940 and VND20,950, equal to the price as observed on Monday.

Source: SGT