Need to stabilize gold prices while waiting for Decree 24 to be revised

DNVN - While waiting for Decree 24/2012/ND-CP dated April 3, 2012 on gold market management to take effect, experts say that the management agency needs to take action to stabilize gold prices. Otherwise, gold prices will continue to break many records.

On March 12, the price of SJC gold bars continued to break historical records, reaching a new peak of 82.5 million VND/tael. On Tran Nhan Tong Street (Hai Ba Trung, Hanoi), people lined up from the counter to the door of the gold shop to buy and sell. Some shops even had customers standing on the sidewalk because there was no more space inside.

This is not beyond the recent predictions of experts. Many experts say that in the current context, no one knows what the final record for gold prices will be.

People line up to buy gold on Tran Nhan Tong Street (Hai Ba Trung, Hanoi).

Dr. Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, said that gold prices will continue to increase, breaking many previous records before the State management agency intervenes in the gold market. The reason is that the world gold price is forecast to have room to increase in anticipation of the US Federal Reserve (Fed) cutting interest rates.

Domestically, the State Bank's policy of loosening interest rates earlier than global central banks (through 4 interest rate cuts since April 2023) has created a large wave of investment capital movement. Cash flows have shifted to assets with increasing value, including gold.

Therefore, according to Mr. Nghia, only when the management agency has an intervention policy, increasing the supply of gold bars, will the gold price reverse and decrease. In other words, the domestic gold price in the coming time will be strongly affected by the amendment of Decree 24/2012/ND-CP dated April 3, 2012 on gold market management (Decree 24). If investors and people want to invest in gold, they should not be hasty.

While waiting for the revised Decree 24 to take effect, experts say that management agencies cannot "stand by and watch" gold prices fluctuate continuously, but need to take action to stabilize gold prices.

According to Mr. Huynh Trung Khanh - Vice President of the Vietnam Gold Trading Association, domestic gold prices are receiving a "boost" from geopolitical tensions in the world. Along with that is the trend of buying gold to diversify foreign exchange reserves of central banks and consumption needs of the people.

Domestically, Vietnam has not allowed gold imports, which is also a factor causing gold prices to skyrocket. Therefore, when the State Bank has not yet intervened in the market, the price of SJC gold has increased and has a high difference compared to the world price.

“The management agency can control by limiting the amount of imports. Not allowing widespread gold imports to create healthy competition and create abundant supply. Not allowing gold imports does not solve the problem, the important thing is to balance supply and demand,” Mr. Khanh recommended.

Experts recommend not allowing widespread gold imports to create healthy competition.

On the other hand, Associate Professor, Dr. Nguyen Huu Huan - lecturer at Ho Chi Minh City University of Economics said that at this time, the State Bank must increase supply by allowing businesses to import gold, or import gold to produce more SJC gold. From there, the gold price may decrease.

At the same time, in order not to lose foreign exchange, the management agency can purchase gold through domestic gold trading units. This will help limit gold imports and meet supply.

Recently, to prevent tax evasion by gold businesses, in the context of gold prices continuously reaching new peaks, tax authorities have stepped in to strengthen inspection and supervision of gold trading.

Accordingly, the tax authority will review all businesses, households, and individuals trading and processing gold, silver, and precious stones to promptly detect businesses, organizations, and individuals trading in gold but not declaring taxes. Detect whether there is a difference between the actual cost price and revenue and the cost price and revenue declared for value added tax.

Through inspection and examination, if organizations and individuals trading in gold, silver and precious stones are found to have violated tax laws and show signs of crime, the tax authority will transfer the case to the police for investigation and handling.

Hoai Anh

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