Vietnam to let companies import gold for first time in years, industry official says

SINGAPORE — Vietnam is expected to allow companies to import gold for the first time in over a decade, as it aims to bridge the widening gap between local prices and international benchmarks, an industry official told Reuters.

The Vietnam Gold Traders Association (VGTA) has been in protracted talks with the government over measures to correct the imbalance in supply and demand of gold, Huynh Trung Khanh, the association's vice chair said.

Vietnam's government virtually took full control of imports and local bullion sales in 2012, with certain large companies allowed to import provided they repurposed it as jewellery for exports.

"The government said they will start official gold imports by July or August. We hope that by July they will allow gold companies to import directly," Khanh said on the sidelines of the Asia Pacific Precious Metals conference.

VGTA expects the proposed change to kick in as early as next month. It would mark a significant departure from the current policy, under which the central bank tightly controls imports. The State Bank of Vietnam did not immediately respond to a request seeking comment.

Attempts to narrow the gap with international benchmarks by holding auctions and allowing four local banks to sell gold in a bid to increase liquidity have largely failed to have a sustained impact, with domestic prices still trading at stubbornly high premiums to global prices.

Immediately reducing premiums on domestic prices is crucial, as VGTA estimates Vietnam's gold demand to surge this year. The southeast nation is among the top 10 consumers of gold.

Gold purchases are set to rise 10 per cent on a yearly basis to 33 million metric tons during the first six months of this year, Khanh said in his