Vietnamese investors have formed long lines outside state-owned banks in Hanoi and Ho Chi Minh City, according to local reports, in a bid to purchase gold bullion at prices lower than those prevailing in the domestic market.
This surge in demand for gold stems from a recent move by the Central Bank of Vietnam aiming to bring domestic gold prices in line with global benchmarks, with the bank now selling gold directly to state-owned institutions, including Saigon Jewelry Company (SJC), Agribank, Vietcombank, BIDV, and Vietinbank, for resale to the public, as Bitcoin.com first reported, for it to be sold to the general public.
The move comes after domestic gold prices skyrocketed to record highs, reaching $3,620 per tael (37.5 grams) last month. The new program allows participating banks to offer gold bullion at a 1.2% discount compared to current market prices, currently sitting at $3,107 per tael.
While the country’s central bank is investigating the source of the price disparity, some experts suggest it could be linked to a weakening Vietnamese dong. Investors, seeking a safe haven for their assets, are turning to gold, a historical store of value known for its relative price stability in a trend mirroring the global rise in gold price this year fueled by growing geopolitical tensions.
As CryptoGlobe reported China has also been accumulating the precious metal, with the Chinese private sector’s gold imports accounted for 543 tons in the first quarter of the year, a figure that was built upon by the country’s central bank, which added 189 tons to its reserves over the same period.
Private gold demand in the country represents a 74% increase from the last quarter of 2023, while the People’s Bank of China’s accumulation rose 38% from the preceding quarter.
Both of these factors helped the price of the precious metal hit a new all-time high and surpass the $2,450 mark for the first time in history. It then enduring a slight correction to now trade at $2,330.
Featured image via Pixabay.