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Over $20 billion worth of gold lying among people   2009-03-26 - VietNamNet/TT

Statistics showed that in the first months of the year, VN took back several billion dollars from gold exports. According to experts, this export showed that there is a big volume of gold currently among people, who are now trying to convert gold into money to do business.


In February 2008, the gold and precious stone export turnover was over $800 million, which indicates that approximately VND15 trillion worth of gold was converted into gold to serve people’s investment plans.


How much capital in gold?


To date, there has been no official figure about how much gold has been imported to Vietnam. However, Vietnam proves to be one of the major gold importers in the world over the last several years.


Vietnam imported 50-60 tons of gold a year, and even up to 80 tons in some years. If it is suggested that the gold price is $30 million/ton, then Vietnam has to pay $1.5-1.8 billion a year, or $2.4 billion sometimes to import gold. With the current exchange rate, the total sum of money Vietnam spends every year to import gold is VND26,700-32,000 billion, and VND42 trillion at maximum.


According to Cao Thi Ngoc Dung, General Director of Phu Nhuan Jewellery Company, the total gold volume now lying among people may have reached 800 tons, which includes 500 tons of official imports. With the current gold price, the volume of gold is worth $24 billion, or VND427 trillion.


Experts have tried to estimate the volume of gold lying among people by counting the volume of bar gold sold onto the market. According to the Saigon Jewellery Company (SJC), since the company launched the SJC brand name, approximately 11.7 million taels of gold has been marketed, or 450 tons of gold.


Gold trading companies have estimated that some 200 tons of gold have been used to manipulate jewellery. Moreover, people have also purchased bar gold of other brand names to hoard.


According to gold traders, it is estimated that a volume of gold has been illegally exported across the borders, and if deducting that illegal exports, the total volume of gold left among people would be about 700 tons, worth no less than $21 billion, or VND374 trillion.


Close link to world’s market allows the withdrawal capital more easily


Gold trading companies said that people, for the first time, have the opportunities these days to withdraw capital from gold once domestic companies collect gold to sell to foreign partners.


The opportunity of withdrawing capital from gold came only when the world’s price was sky high, and people purchased gold before at high prices, which made them fail to preserve their capital as they initially hoped.


People nowadays understand that the increased gold prices do not affect the prices of commodities and services.


Dung said that the capital withdrawal from gold is made not only by those who have big volumes of gold, but also by lower incomer earners, now holding jewellery gold.


According to Dung, several tens of thousand billions VND worth of capital are going to be injected into securities, real estate or bank deposits. She said that the capital withdrawal from gold can be obtained easily only when the domestic gold market has connection with the world’s market. Because of the close link to the world market, Vietnamese people, for the first time, have the chance to make a profit by selling gold at high prices to the world.

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