Vietnam is anticipated to allow firms to import gold for the first time in over a decade, as it moves to address the growing disparity between local prices and international benchmarks, as mentioned by an industry official to Reuters.

Huynh Trung Khanh, the vice chair of the Vietnam Gold Traders Association (VGTA), stated that the association has taken part in lengthy discussions with the government regarding measures to rectify the imbalance in the supply and demand of gold.

Back in 2012, the government virtually took complete control of imports and local bullion sales, with specific large firms permitted to import as long as they repurposed it as jewellery for exports, Reuters reports.

“The government said they will start official gold imports by July or August. We hope that by July they will allow gold companies to import directly,” Khanh said at the Asia Pacific Precious Metals conference.

VGTA anticipates that the proposed change will come into effect as early as next month. This would represent a notable departure from the current policy, where the central bank tightly regulates imports.

Efforts to reduce the disparity with international benchmarks through auctions and permitting four local banks to sell gold, aimed at boosting liquidity, have largely been unsuccessful in maintaining a lasting effect.

Yet despite these measures, domestic prices continue to trade at persistently high premiums compared to global prices.

Furthermore, Khanh said during his presentation at the conference that gold purchases are expected to increase by 10% year-on-year to 33 million metric tons in the first six months of this year.

Retail buyers, who perceive gold as a means of wealth preservation to hedge against economic uncertainty, constitute the majority of purchases in the Southeast Asian economy, which is home to around 100 million people.

“The key reasons for this strong retail investment demand were the sharp decrease in saving interest rates, the frozen real estate and the constant devaluation of the national currency versus the US Dollar,” Khanh said.

“We have had people queuing in the streets, in the sun and rain to buy more gold.”