Bullion from jewelry will lead to smuggling into Vietnam, warns gold industry

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Producing bullion from gold jewelry bought in the market, many of it of unknown origin, will open the door to smuggling and gold laundering, industry insiders warn.

Last week state-owned Saigon Jewelry Company (SJC) sought permission from the State Bank of Vietnam to buy gold jewelry to make gold bullion, Tuoitre newspaper reported.

Saigon Jewelry, the country's sole gold producer, said buying jewelry would improve supply which has fallen sharply.

Tran Thanh Hai, general director of the Vietnam Gold Investment and Trading Company, which trades gold, said since the central bank held monopoly of gold production and appointed SJC as its official producer in May, there has hardly been any smuggling in of gold.

Using jewelry of unclear origin to produce bullion would provide smugglers with the opportunity to bring in and sell gold at massive profits, he warned.

The State Bank recently permitted SJC to process 1.7 tons of gold, but this has not been enough to demand which has surged since prices jumped in August on the back of a global rise.

The price has risen by VND5 million for a tael of 37.5 grams, or 10 percent, since August. The precious metal hit a 12-month high last Friday when SJC gold went up to VND47.4 million (US$2,274) per tael.

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