Already this year, $900 million in gold has been exported from Vietnam  -- $800 million in May alone. 

The general director of a commercial bank said that over the last two months, the volume of gold on deposit there has decreased by 15 percent, or 16,000-20,000 taels.  People have withdrawn their gold deposits and sold gold while the gold prices were high.  Further, as deposit interest rates paid for gold have fallen sharply, many people have  have sold gold for dollars or dong, and deposited the cash at banks at a higher interest rates

Another banker in District 1 in HCM City told a similar story.  He said that the volume of gold deposited at his bank has fallen by 30,000 taels in a short time. Most of the people deposited gold at banks while waiting for the gold prices to increase.  However, seeing the price of gold stabilize for six months, he explains, they have decided to sell their gold for cash to make other investments.

Analysts confirm that the quiet gold market and unattractive interest rates banks are paying on gold deposits have induced people not to keep gold any more. Overall, the volume of gold on deposit in Vietnam’s banking system was about 400,000-500,000 taels, but has now dropped to below 300,000 taels.

Commercial banks themselves are indifferent to depositors who withdraw gold deposits, because they have no one to lend to since the Government banned speculative trading in gold early this year.  The gold exchanges have been shuttered and people no longer borrow gold for speculation.

Even so, tens of thousands of taels are still being traded every day. Who are the buyers and sellers?

A senior officer of a big gold company said very few people buy gold nowadays to keep as an asset or pay for a house.  The main buyers and sellers are gold companies and gold shops.

Getting billion dollars from gold exports

The CEO of a gold company belonging to a bank said that in May alone, the company exported 3.5 tons of gold, mostly jewellery gold. He said that at an  average export price of 27 million dong per tael, the exporter has earned $134 million, or 2.56 trillion dong, from gold jewellery exports.

Phu Nhuan Jewellery Company reported  export revenue of $20 million in the first five months of 2010, surpassing its total export revenue of $16 million for all of 2009.

The General Statistics Office reports jeweller’s gold exports from Vietnam of $800 million in May.

Nguyen Thi Cuc, a Phu Nhuan Jewellery executive, said that because domestic prices have been lower than world prices for a long time now, the company has bought gold from Vietnamese sellers instead of asking their foreign clients to provide the gold for jewellery orders.

How much gold are people holding?

There is been no official estimate of the total amount of gold imported to Vietnam over the years.  For many years, Vietnam was once of the world’s principal gold importers, including imports through both official and unofficial channels.

According to the State Bank, declared gold imports in 2005-2008 were 281 tons. In 2009, declared gold imports were inconsiderable. In 2010, only SJC has been allowed to import gold, six tons altogether.

The World Gold Council estimates that only 20 to 30 percent of all the gold held by Vietnamese is deposited at banks.  The Council believes that 500-600 tons have been imported to Vietnam ‘over many years.’

An industry expert calculates that in the last three years, $2.7 billion of gold, some 90 tons, has been exported through official channels, and that the cash has been invested mainly in business ventures.

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