Now the government has said it will ban the trading of gold bars in the "free market" as part of a package of measures designed to rein in soaring prices and tackle deep-seated economic imbalances. But it has befuddled investors and ordinary people alike.
Buffeted by persistent inflation and weakness in their currency, many Vietnamese prefer to save in gold and dollars. Their fondness for gold, which is often used to settle property deals and other large transactions, and for dollars puts further downward pressure on their currency, the dong, in a negative feedback loop from which it is hard to escape.
Vietnam's central bank said on Friday that to prevent speculation and market manipulation, the government would issue a decree in the second quarter of this year banning the free-market gold trade and thereby preventing cross-border smuggling. But, given the government's tendency to issue decrees and circulars by the truckload, gold traders and economists say the real impact of this latest pronouncement will be determined by officials' actions rather than words.
Cao Sy Kiem, a former central bank governor, told the Tuoi Tre newspaper that while the government needed to tackle the proliferation of gold and dollars in order to be able to make sound monetary policy, a "detailed road map" was needed to ensure the problems caused by unofficial gold trading were not made worse.
A gold trader on Ha Trung street in Hanoi, one of the most popular locations for the gold shops that double as black-market dong-dollar exchange houses, questioned how effective this latest move would be.
He said: "The government needs a clear definition of gold bars, or else gold shops will make whatever shape necessary to avoid the law."
One economist said that, as transactions in gold and dollars were circumscribed by law, what was needed was serious enforcement and serious alternatives, not more decrees. Given much of the gold in Vietnam is held in people's home safes, accurate statistics on the amount of the metal in the country are nigh on impossible to collate. Last year the central bank governor denied speculation that there was as much as 1,000 tons of gold in Vietnam, equivalent to 45 per cent of annual gross domestic product.
The onshore gold price, which trades at a premium to international prices, fell initially at the end of last week as news of the proposed trading ban broke. But it stabilised on Monday at 37.6-37.7 million Vietnam dong per tael, equivalent to 37.5 grammes or 1.21 troy ounces, according to Reuters.
Evidence, if it were needed, that it will take a lot more than another decree to coax the gold out of Vietnamese savers.
