The price of gold rings in the past weeks has at times surpassed gold bars in Vietnam, Dan Tri is reporting. At one point they were selling for VND 150,000 higher than the price of gold bars.
This is problematic in that if gold merchants start melting down gold bars to make gold rings it could put greater pressure on Vietnam’s heavily regulated gold supply.
This is in line with the market moving to its own beat, often much higher than the world gold price, on the back of regulations that severely limit the importation of gold yet a culture that sees gold as an important store of wealth. This, coupled with challenging economic conditions, has fueled demand with the State Bank, reluctant to allow the import of more gold in the event it might put greater pressure on the local currency. Instead it has taken to selling gold from its own reserves to deflate the gold bar price.
State Bank gold bars were previously being sold through four majority state-owned banks, at well below market price, with huge queues of customers looking to buy up the cheap State Bank gold. This has since moved online and now that demand is much less visible. That said, the rising price of gold rings could suggest there may be a supply side issue with respect to gold bars.