The State Bank of Viet Nam will investigate the use of gold-based derivatives at commercial banks in order to reduce systemic risks and control speculation in gold, the central bank announced yesterday.
HA NOI —
It made the decision to investigate following reports that several commercial banks were offering short-term futures contracts on gold, a practice banned by the State Bank, which instructed banks earlier last month to reduce gold holdings and wrap up this type of business by May of next year, including lending to finance gold purchases.
Exceptions to the ban include loans approved by the State Bank Governor for purchases of gold to make jewelry and gold bars as well as to import gold as a raw material under import licences.
Banks are also required to report to the central bank every Friday on gold trading operations.
Gold prices yesterday rose by 3 per cent to VND46.6 million (US$2,230) per tael, marking the highest level over the past six weeks. (One tael is equivalent to 1.2 ounces). Sai Gon Jewelry Co, Bao Tin Minh Chau, Agribank Gold and Jewelry Co, Sacombank Jewelry Co, Phu Nhuan Jewelry Co and Doji all quoted buy/sell prices at the end of the day yesterday at VND46.35/46.6 million per tael.
Global prices have been hovering in recent weeks at over $1,790 per ounce. Based on the prevailing exchange rates, the domestic gold price continued to exceed the global price by about VND300,000 per tael. — VNS