Factors Affecting the Disparity of Vietnamese Gold Prices and Worldwide Gold Prices
Ho Thanh Tri, Vo Thi Nga
Keywords:
gold price, disparity, exchange rates, import tax, seasonal, competitiveness
Abstract:
Gold is a precious metal which is highly appreciated because of its prominent role in the world
of investments, savings, and consumption. Although gold is no longer used as a primary form
of currency in some countries, it continues to have a strong influence on the value of the currencies
of those countries. Compared to all the other precious metals used for investment and
trade, throughout history gold has always been preferred. The value of gold is a factor mentioned
in the commodities and futures market. Vietnam does not produce/mine enough gold to meet
its domestic requirements. As the country has to import over sixty percent of its gold, Vietnam’s
gold price is mostly influenced by the world price movements, in turn increasing or decreasing
domestically. Therefore, understanding and addressing the factors resulting in gold price disparities
is essential in policy adjustments to stabilize the price of gold and prevent speculation, which
may cause economic destabilization as well as a loss of competitiveness in Vietnamese market
for gold and other precious metals. The study includes monthly data collected between January
2006 and December 2015. Exchange rates, import tax, and seasonal factor data are included in
the model as independent variables. According to the empirical findings, the foreign exchange
rate had a negative impact on the disparity between Vietnamese gold price and the world price.
The import tax has a positive effect on the discrepancies among gold prices, while the seasonal
factor variable was not statistically significant at 5 percent and negative concerning the disparity
of the gold price.
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 Factors Affecting the Disparity of Vietnamese Gold Prices and Worldwide Gold Prices [PDF file] [Filesize: 656.06 KB]
 10.7441/joc.2019.03.10
Tri, H., T., & Nga, V., T. (2019). Factors Affecting the Disparity of Vietnamese Gold Prices and
Worldwide Gold Prices. Journal of Competitiveness, 11(3), 160–172. https://doi.org/10.7441/joc.2019.03.10
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