Most explanations about soaring gold prices are not convincing enough nor accurate as far as international speculators are concerned.
In the wake of recent wild fluctuations in the gold market, a VOV reporter interviewed Kieu Huu Dung, former Head of the Banking Organisations Department under the State Bank of Vietnam (SBV) about the issue.
Reporter: What is your assessment of the recent gold “fever”?
Mr Dung: The gold fever has originated from soaring prices in the world and also from speculative activities in the domestic market. In my opinion, the export and import of gold is a very sensitive issue in Vietnam. It is essential to open doors and liberalise this business as gold is a kind of foreign currency that can be exchanged into another foreign currency.
Reporter: There has been growing concern over “cheap export- and expensive import”, while the country’s foreign currency sources are not just reserved to buy gold. Do you think so?
Mr Dung: We should not be concerned about how much foreign currency we need to import gold. Some years ago we did export a lot even through unofficial channels despite the fact that people were keeping a huge amount of gold.
It is not right to say gold imports cause a drain on foreign currency.
The Vietnamese people have the practice of keeping more gold than is needed in comparison with their living standards. If gold is seen as a kind of commodity whose value can be easily changed, gold export-import or foreign currency exchange activities will help to early stabilize the domestic market.
Reporter: What is your prediction about gold prices in the near future?
Mr Dung: Gold prices depend much on international speculators. So it is very difficult to make any safe prediction. When the US dollar depreciates, gold prices go up; but in some cases the US dollar appreciates in tandem with gold.
The reason for many foreign central banks to continue importing large volumes of gold is that the world economy is not yet out of recession.
For instance, the Republic of Korea is still keen on importing more gold after many years. Judging from this background, gold prices are likely to rise further.
Reporter: Thank you very much.
VOV
