There will be a shortage in gold supplies for production in Vietnam after the country exported around 36 tons of the precious metal in the first six months, an industry official said.
"The State Bank of Vietnam meant to resume gold imports, but a recent trade deficit figure of nearly US$7 billion may have made the bank hesitant," Huynh Trung Khanh, vice chairman of the Vietnam Gold Business Association, told Thanh Nien.
Vietnam's trade deficit widened to $6.73 billion in the first half from $2.26 billion in the same period a year earlier, according to the General Statistics Office.
The current price gap between local and international gold prices was because local demand exceeded supply, Khanh said.
However, others have said that the gap is also driven by psychological factors, not merely by demand and supply mechanics.
A gold trader who wished to be unnamed said few transactions are being made in the market. But the trader believed that gold imports can help bring prices down by discouraging speculatory activity.
The central bank this month decided to lift restrictions on gold imports, allowing local traders to import unlimited volumes of gold in an attempt to bring local prices down.
Central bank governor Nguyen Van Giau told Thanh Nien on Friday that some traders had applied for import licenses. However, he said it's unlikely they will import gold even if they get the license because it's not profitable to do so now.
The gap between local and international gold prices narrowed to around VND200,000 per tael on Saturday, compared to VND700,000 a week ago. A tael is approximately equal to 1.2 ounces.