Vietnam Has Suspended All Gold Imports

Concerns about the weak local currency and the falling USD are driving huge local demand for gold.

Vietnam’s communist government in Hanoi has just temporarily banned all gold imports into the country.
Hanoi has withdrawn licenses for any further imports of gold. This move is desperate attempt to control the country’s trade deficit and support the depreciating local currency (the ‘Dong’, no offense intended).
So far this year, Vietnam’s trade deficit has already tripled, local stock and real estate markets are dropping fast and consumer inflation is at 25% year on year.
For the first half of 2008, Vietnam has imported around 60 tonnes of gold valued at $1.8 billion USD which is a 100% increase over the same period in 2007. This record importing of gold bullion has now made Vietnam the world’s largest market for gold bullion which has also passed both India and China.
Last month in an effort to slow imports the government doubled the incoming duty on the yellow metal but it had no effect on demand. With their local currency dropping fast, this move to suspend all gold imports will cut domestic supplies and certainly send buyers scrambling for hard assets.

Article by Clarence W.