January 8, 2004
BBC News World EditionRising prices are a golden black
market opportunity.
Vietnam's central bank has given the go-ahead for the country to import up to 10 tonnes of extra gold in the first quarter of 2004.
The diving dollar pushed gold prices to a 15-year high on world markets two days ago, hurting business and savers in Vietnam. Gold is used as hard currency for big business deals in Vietnam, which has a thriving black market for the metal. The central bank hopes to push down the local price by pumping up supplies.
Winners and losers
"This decision was made last week by the State Bank of Vietnam because of the rise in gold prices on the world market," the Agence France Presse news agency quoted a Bank official as saying.
Gold hit $430.50 an ounce on 6 January, shooting past the $430 mark for the first time since December 1988. The US dollar has plumbed an 11-year low against sterling and an all-time low against the euro since the start of 2004.
The result has been to push up the gold price by creating a rush of buyers for the dollar-denominated bullion. This is bad news for the Vietnamese economy - which relies on imports for nearly three quarters of its gold - but good news for the country's black market operators.
Media reports said gold was changing hands on Vietnam's black market on Thursday for 8m dong ($520) for one tael, which is roughly 1.3 ounces. Analysts expect gold prices to remain strong; some predict they could go as high as $450. Gold closed in neighbouring Hong Kong at $418 an ounce, after closing at $421 in New York on the previous day.
"Market consensus is of the view that gold is consolidating before an attempt to again push higher," said analysts at NM Rothschild.