Vietnam sees Gold demand dip after June 30 deadline
As part of the drive, banks must return all gold deposits to investors by June 30, while the State Bank of Vietnam is selling metal to lenders and trading companies to boost domestic supplies.
As Vietnam banks entered final few days of returning their gold investments to investors as per central bank directives, the country expect decline in gold demand.
Analysts said gold demand in Vietnam will drop significantly after the deadline because there will essentially be no more demand from banks and the auctions are set to continue.
They added that stricter regulatory measures implemented by the State Bank of Vietnam and the fear of a steep decline in gold’s price may affect gold demand.
Analysts also sees a drastic drop in the gap between domestic and global prices for immediate delivery by up to $160 an ounce by the end of July.
The premium reached an all-time high of more than VND6 million in April, when bullion tumbled into a bear market, spurring physical demand across Asia.
Vietnam’s central bank has tightened rules on gold trading, including making itself the sole importer, in a bid to limit the impact of gold prices on the exchange rate and redirect financial resources toward economic development. .
As part of the drive, banks must return all gold deposits to investors by June 30, while the State Bank of Vietnam is selling metal to lenders and trading companies to boost domestic supplies.
Vietnam consumed 77 metric tons of gold last year compared with 864.2 tons in India, 776.1 tons in China and 80.9 tons in Thailand,
Vietnam central bank held several auctions from March to help banks return deposits by June 30. So far 709,800 taels, or about 27 tons, have been sold in 28 auctions through June 7.
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