Local commercial banks have raised their interest rates on gold deposits to try and attract more clients.
The Asia Commercial Bank (ACB) on Tuesday raised the rates on three-month gold deposits by 0.1-0.5 percentage points to 1-1.1 percent per year.
Meanwhile, Eximbank has increased their rates several times over the past month, now offering to pay 0.8-1 percent for gold deposits of one to three months.
Dinh Thi Thu Thao, deputy general director of Eximbank, said her bank needs to attract more gold to meet the rising demand of gold traders and homebuyers who make payments in gold. Thao also said some gold businesses need the precious metal for production purposes.
Bui Tan Tai, deputy general director of ACB, said when interest rates were just slightly higher than 0 percent, gold deposits declined sharply so the bank had to increase them.
Analysts said the hike in interest rates on gold deposits at the two banks could spark a new race.
But Vu Dinh Anh, deputy head of the Institute of Market and Price Research, does not think there's a really high demand for gold.
He said there has been speculation that investors betting on a fall in gold prices are creating a high demand for gold, forcing banks to raise their interest rates. But this speculation cannot be proved now because only two banks have raised their rates, Anh said.
"After gold exchanges were shut down (in March), banks have had large gold reserves," Anh said. "There has even been a suggestion that gold depositors should be charged a precious metal preservation fee. Now banks are raising interest rates suddenly and it's a conspicuous move."
Still, Anh said the interest rate hike is not all bad because it means banks now consider gold as a currency that they can lend and borrow more easily.
Eased credit policies on gold will enable clients to increase deposits, adding a value of around US$4-5 billion to the country's international reserves, he said.
Some bankers told the Tuoi Tre newspaper that with dong interest rates under control, banks can only raise gold and dollar deposit rates if they want to raise more funds.
The price of gold in Vietnam hit VND29.76 million per tael Wednesday after global market prices surged to record highs.