A simple compare-and-contrast exercise tells you a lot about the differeing states of the developed and emerging economies.
First, in Europe, where more and more Europeans are taking their gold jewelry into smelters:
Times Online: “We’ll get hundreds of kilos of scrap jewellery from Europe this year and I’ve never seen that amount before,” said Erhard Oberli, chief executive of Argor-Heraeus, a large gold refinery.
Here in Ticino, the Italian-speaking Swiss canton that is the world’s gold processing capital, with about a third of total global output, no one is complaining about the trend.
At Argor-Heraeus, one of three firms that dominate the market, the transformation of jewellery into bars will supplement the main business of refining ore mined in Latin America, Asia or elsewhere.
Now, here’s the situation in Vietnam, where the government had to intervene because the demand for gold has gotten so out of hand.:
Thanhiennews: The price of gold in Vietnam reached a record high of VND29 million ($1,620 at interbank rate) per tael at noon on Wednesday. Following the lift of the import ban, the market turned quiet and the metal retreated to VND27.5 million ($1,530), according to prices quoted by Saigon Jewelry Holding Company, also known as SJC. As of Thursday morning, the price dropped to VND26.2 million. One tael is about 1.2 oz of gold.
The excessive price hike on Wednesday left many gold traders perplexed.
Nguyen Ngoc Que Chi, general director of Sacombank Jewelry, said she could not understand why many people rushed for gold even when prices increased to an “unreasonably” high level.
“It’s unbelievable that the price of gold could be driven that high,” said Nguyen Thi Cuc, deputy general director of Ho Chi Minh City-based Phu Nhuan Jewelry Joint Stock Co.
“On Wednesday morning alone bullion sales at the company was already three times higher than a usual full day’s figure,” Cuc told Thanh Nien. As the company didn’t have enough gold to sell, it had to ask buyers to return two days later, which made them even more anxious, she said.