Buffeted by high inflation and fears about the stability of their currency, the Vietnamese are among the highest per capita consumers of gold in the world. But, faced with a large trade deficit and a regular shortage of dollars to buy imports, Vietnam’s central bank has long considered this to be a rather unhealthy appetite.

In 2008, the government tried to ban gold imports and earlier this year, it ordered all gold trading floors to be closed. These restrictions, however, only led to an increase in gold smuggling and a surge in the domestic price of gold, which is running at a premium of about $20 an ounce to global prices, according to Reuters. Now the authorities have changed tack again in an effort to reduce the premium. Continue reading »