Gold Decree fails to keep prices down in Vietnam

The new decree was expected to stabilise the gold market, limit hoarding and speculation, and minimise the influence of the gold market on monetary policy.

HANOI(BullionStreet): Nearly two weeks into Gold monopoly, Vietnam gold prices cobntinued to trade much higher to global prices.
On Tuesday, Vietnam gold price has exceeded VND 42.2 million a tael as dollar prices continue to rise to the VND 21,000 per dollar threshold.
The price of the precious metal has regained some VND110,000-120,000 a tael after inching down VND100,000 a tael on Monday, following the global trend.
On an average, Saigon Jewelry Co (SJC)-produced gold bullion's were priced at VND42.1 a tael and VND42.23 million a tael for bid and ask, respectively.
Meanwhile, Doji Group quoted the bid and ask SJC gold bullion prices at VND42.12 million a tael and VND42.22 million a tael.
In Ho Chi Minh City, the respective prices of gold bullion offered by SJC were VND42 million a tael and VND42.22 million a tael.
The official exchange rate of Vietnam dong and US dollar at commercial banks increased by VND40 a dollar compared with yesterday, approaching the highest level in the last two months.
With the official exchange rate, plus taxes and fees involved, the domestic gold price is higher than the world price by VND900,000 a tael, narrowing the gap of over VND1-1.5 million a teal from May.
Vietnam's Gold Decree came into effect on May 25, stipulating that the Government would assert a monopoly over gold bullion production as well as import and export of gold.
The new decree was expected to stabilise the gold market, limit hoarding and speculation, and minimise the influence of the gold market on monetary policy.
The regulation would classify bullion trading as a conditional business requiring institutions and individuals wanting to buy or sell gold to obtain licences from the State Bank of Viet Nam.