Central bank statistics show that Vietnam has ample gold supplies in hand, even if the recent price hike may suggest otherwise.
According to the State Bank of Vietnam, the public holds between 300 and 500 tons of the precious metal while banks have about 100 tons of gold deposits.
Commercial banks in April were ordered to stop lending gold and restrict deposits of the metal. They are also not allowed to sell gold.
Experts said these restrictions have caused the price of gold to rocket this week, despite the large holdings in the country.
The metal hit a record high of VND46.3 million (US$2,230) per tael on Tuesday and then fluctuated wildly over the next two days. The price was recorded at VND44.8 million per tael on Friday morning. A tael is equal to 1.2 ounces of gold.
In an attempt to stabilize the gold market, the central bank has allowed local traders to import a total of five tons of gold.
Tran Thanh Hai, general director of gold investment firm VGB, said Vietnam could have saved a large amount of dollars if banks were allowed to sell gold and cool down the market when necessary.
Banks can buy gold to balance their accounts later when prices fall, he said. Until then they only need to pay a small deposit to overseas traders to cover the temporary shortfall.
He estimated that traders have to spend more than $50 million on every ton of gold imported.