Viet Nam's Decision To Close Its Gold Trading Floors

I have yet to see a credible "official" reason for the closing of the Viet Nam gold exchanges.  I just got off the phone with a colleague, however, who does business with some Cambodians.  The person he deals with told my colleague that there is significantly more demand for gold in Cambodia and Viet Nam than there is supply and that most of the gold that is sold to the citizens in those countries is smuggled in.  This account is consistent with the excellent reporting on Viet Nam gold trading provided on a daily basis to the Midas report at http://www.lemetropolecafe.com/ by John Brimelow.  Viet Nam has quietly become one of the largest gold importers of gold in the world.  Apparently, as per the Cambodian source, the voracious appetite for gold is now endemic to all of Southeastern Asia.  Even more interesting, this source told my colleague that Honk Kong and Singapore are slowly usurping London as the nexus for global physical gold trading.

I have postulated for a while now that part of China's long term goal is to become the largest owner of gold and to control the global gold trading market as part of its plan to become a global economic superpower.  All the indications are there that this is now occurring, including its recent move to allow - and even encourage - its citizens to accumulate gold and silver.

Getting back to Viet Nam, I suspect that the Government's decision is an attempt to increase control and regulation of the gold market, as Viet Nam was actually the largest importer of gold in 2008.  Apparently this large amount of buying has put downward pressure on the dong (Viet Namese currency), as citizens have been en masse dumping the sovereign currency in exchange for gold.  Ultimately, I believe this will put upward pressure on the global price of gold, as investors in Viet Nam rush to buy as much gold as they can before the end of March, which is when all 20 gold trading floors are required to stop operations.