Gold Losing Strength in Cyprus, Holland, And Vietnam?

Credit institutions in Vietnam are no longer allowed to give loans to customers in exchange for gold, according to the State Bank of Vietnam.

Last week, the SBV, which is Vietnam’s central bank, issued a document saying the bank plans to strength its management of gold-trading activities.

The SBV also told credit institutions they could not turn gold deposits into other currencies, nor use the deposits as collateral for loans from other credit institutions.

In addition, customers will be required to pay fees on their gold deposits at financial institutions. And in Holland, the country has reacted to the Cypriot crisis by halting gold delivery at one of its major banks, reports The Daily Sheeple. The Dutch Bank ABN Amro has sent a letter to its customers informing them “that they will halt extradition and physical delivery of their clients’ gold holdings effective April 1st.” So while citizens in Cyprus are frantically withdrawing cash from ATMs, Holland is preparing to halt any physical gold runs, and Vietnam now prohibits gold for credit purchases.

It seems gold is losing its power – that is, not the price of gold but the perceived power it has in the wake of financial crises in Europe. While investors might traditionally advise those concerned about the future of their bank accounts to buy precious metals, it’s not as safe of an option as one would think today.

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The tangible asset should hold its value if the economy crashes, right? Many factors might prove otherwise.

Selling gold bars back might not be easy. The Telegraph reports that the process isn’t transparent, either. Those who buy and sell gold profit from the difference — known as a spread — in the process. That margin can be quite large sometimes. Some dealers also only buy back their own gold.

In Thailand, you can’t go far without seeing a gold retailer or pawn shop. Tourists come here hoping to get the precious metal at a considerably lower price. There are, however, practical and legal considerations to keep in mind when buying gold in Thailand.