Gold demand in the global market is set to go up following the State Bank of Vietnam's decision to allow companies to import gold again.
Since Vietnam does not import gold regularly, foreign partners have not prepared gold for delivery. So, the Vietnam importers are expected to buy gold from the global bullion markets which will make some price movements.
The gold supply from the public is dropping since many sold their gold months ago. If enterprises import gold, they can still export gold under the mode of jewellery products when the world price rises higher than the domestic price to earn foreign currency.
The government's decision to lift the ban on gold imports is part of measures to regulate the domestic market.
The decision follows applications from many jewellery firms and banks asking permission to resume gold imports.
The decision was also issued in the context of domestic gold prices increasing to levels much higher than the world rate. The big difference encouraged gold traders to seek dollars and find ways to import gold illegally. Consequently, the exchange rate shot up.
However, it is very difficult to predict accurately the impact of imports on domestic gold prices as well as profit in the coming time.
The continuous rise in gold prices on the market over the last few days was related to rumours of a scarcity of the precious metal in the market.
In order to push up prices, some companies claimed they had exported all their gold while others said their sales had doubled or tripled on these days.
Gold imported over the last four years amounted several hundred tonnes while export of the precious metal via quotas in 2008 and 2009 was just 40 tonnes. In the first six months of this year, about 36 tonnes of gold was exported as jewellery.