Stabilize the gold market to stabilize the economy

The gold market has recently become the center of attention, as prices have continuously increased erratically, widening the gap with world prices.

The gold market has been the center of attention recently. (Source: Kitco News)

Since the beginning of the year, SJC gold bars have increased by 17 million VND/tael. The price of SJC gold bars officially peaked at 92 million VND/tael, the highest ever.

In fact, gold is no longer a means of payment, but strong price fluctuations will directly affect production and business, because when a large amount of money from the people is absorbed into gold, it will cause capital loss, causing disadvantages for the economy.

In addition, when the gold price increases compared to the world price, it will lead to gold smuggling, leading to increased use of USD, leading to inflation and foreign currency loss. It is very necessary to curb the increase and stabilize the gold price.

There are many reasons for the skyrocketing gold price. Some experts even say, “the increase in gold price is due to the convergence of favorable weather, favorable terrain, and favorable human conditions.”

The “right time, right place” here means that interest rates are maintained at a low level, creating an ideal environment to create a wave for any type of asset. In addition, domestic gold is also supported by the increase in world gold prices due to geopolitical instability, and the stock and real estate channels are no longer attractive to cash flow.

“Harmony” is due to crowd psychology. People patiently wait in long lines to buy gold. Domestic gold prices continue to increase as both businesses and people believe that prices will continue to increase, while limited supply makes sellers want to “hold on to their goods” while buyers are willing to pay high prices.

Of course, the domestic gold price increasing too quickly and too high is also due to many other related factors, from management policies that are no longer suitable in the new period, market management issues, limited supply, devaluation of the dong...

Under the direction of the Government, the State Bank promptly introduced a number of necessary measures to stabilize the market. However, these measures could not have a positive impact in the short term, while transaction demand remained high.

Meanwhile, the general context is that the world gold price is also anchored at a high level and the central banks of countries, especially some of the world's leading economies, are changing the structure of asset reserves - replacing valuable paper reserves or strong foreign currencies with gold. The demand for gold therefore continues to increase, making the gold investment channel more attractive, forming a new, higher price level.

In this situation, the timely direction of the Prime Minister on May 18 with strong administrative measures becomes especially important to ensure stability, transparency, control asset bubbles and prevent price manipulation... and can bring immediate results. Accordingly, the State Bank is required to strengthen discipline, order, and comply with regulations on gold trading activities; if there are signs of law violations, they must be promptly handled; and the inspection of the gold market must be completed in May...

It is expected that the Government's directives will be implemented soon, because stabilizing the gold market also means stabilizing the macro economy and national financial and monetary security. Only when there is stability, economic growth will be truly sustainable.

Source: https://baoquocte.vn/binh-on-thi-truong-vang-de-on-dinh-kinh-te-272291.html