HANOI, Vietnam -- Vietnam will resume gold imports for the first time since June 2008 to try to curb speculation and soaring prices in the domestic market.
Importers will be permitted to buy the metal to stop prices from rising excessively, the central bank said in a statement on its Web site today. Five or six companies will be allowed to bring in unlimited amounts of gold, online news service VnExpress reported, citing governor Nguyen Van Giau.
Gold rose to a record in London and New York as a third day of declines for the dollar boosted the metal's appeal as a safe investment. In Vietnam, concern that the government may be forced to devalue the dong has pushed up domestic gold prices.
"Taking advantage of unstable international gold prices and people's concern that prices will rise further, local speculators have pushed prices to a very high level," the statement said. The resumption of imports is aimed at "stabilizing the market, and preventing speculation."
Dong forwards dropped to the weakest in more than 16 months and the spot rate reached a record-low on speculation investors stepped up purchases of dollars to buy gold.
One-year non-deliverable forwards for the dong fell 6.4 percent to 21,555 per dollar, and earlier slumped to 22,900, the lowest level since June 25, 2008. Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
The price of gold in Vietnam was 27.5 million dong ($1,539) per tael today, according to a telephone directory information service run by Vietnam Post's Telecommunications. It earlier reached a record high of more than 29 million per tael, online newswire Dan Tri reported, citing local jewelers. One tael is about 1.2 oz of gold.
The Southeast Asian nation banned imports in June 2008 to help narrow the trade deficit.
"That made supply scarcer, which then pushed prices up," Dinh Nho Bang, vice chairman of the Vietnam Gold Traders’ Association, said in a Nov. 6 interview. "Local gold demand has increased dramatically recently when international prices jumped."
Vietnam's central bank also warned people "to be cautious in making decisions on buying gold in the context of complex fluctuations in international gold prices."
Gold for immediate delivery rose as much as $11.53, or 1 percent, to $1,117.33 an ounce in London and traded at $1,115.84 by 9:30 a.m. local time. December gold futures gained for an eighth session on the New York Mercantile Exchange's Comex division, climbing as much as 1.4 percent to $1,117.80 an ounce, and were last at $1,116.20.
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