Need to eliminate the habit of hoarding gold, prevent the phenomenon of "goldenization"

The habit of investing, storing and trading physical gold is outdated.

Faced with the recent “unstable” developments in the domestic gold market, authorities have taken many measures to manage the market and stabilize gold prices. Among them, there are effective solutions that have brought domestic gold prices closer to world gold prices.

However, according to experts, this is only a temporary solution. In the long term, the authorities must implement many synchronous solutions. Among them, the important solutions are amending Decree 24, issuing gold certificates, opening a gold exchange and "securitizing gold".

Dr. Nguyen Tri Hieu - Economic expert stated: "To better manage the gold market, I always support the policy of anti-goldenization. Goldenization here means that people are pouring money into gold, paying in gold, commercial banks mobilize and lend gold. All of these phenomena were previously resolved well, but recently, it seems that the phenomenon of goldenization has shown signs of returning."

Looking from the experience of managing the gold market in advanced countries around the world, Dr. Nguyen Tri Hieu gave an example from a modern and developed economy like the United States, people no longer have the habit of trading physical gold because it contains many risks related to security issues and gold buyers must buy insurance. They often buy gold certificates at the stock market and gold trading companies.

In the Vietnamese market, the expert said that the habit of keeping gold and trading physical gold has become outdated, while currently there are conditions to buy gold and trade gold through the stock market. However, in Vietnam there is still no company or bank that issues gold certificates.

“Therefore, I have repeatedly suggested that the State Bank should consider collecting gold from people and issuing gold certificates. However, the State Bank has not yet done that, let alone commercial banks,” said Dr. Hieu.

Dr. Nguyen Tri Hieu also emphasized that first of all, we need to change the habits of gold investment and gold trading of Vietnamese people, which are still very backward, and to modernize the gold market, we need gold certificates.

It is necessary to thoroughly eliminate the phenomenon of "goldenization"

According to Dr. Nguyen Tri Hieu: “There are two things we need to do now: set up a gold exchange, in which all transactions are updated such as when to buy and sell, what the selling price is, etc. Second, besides the gold exchange, there must be a "gold stock market". These two things must be done to change the habit of investing and hoarding gold and completely eliminate the phenomenon of goldization”.

“All of these things need to be done in sync, from opening a gold trading floor, securitizing gold to changing Decree 24. In amending Decree 24, there are two important provisions: the need to remove the SJC national gold monopoly brand. Second, the State Bank of Vietnam withdraws from its role as the sole gold importer in Vietnam and hands over gold imports to gold traders.

If we can do all of this, we will have a comprehensive gold market. At the same time, we will complete the program against “goldenization” and turn the gold market into a market that benefits the country and the people, a market that contributes to the economy,” the expert commented.

Sharing the same view, Associate Professor Dr. Ngo Tri Long - former Director of the Institute for Price Market Research (Ministry of Finance) also said that in amending Decree 24, it is necessary to consider opening a gold exchange.

“Currently, Vietnam does not have a centralized market, nor a centralized gold trading place. Therefore, price transparency is not clear, and there are many small retail stores, showing fragmentation, with many independent sales segments, so the market is not transparent. An opaque market will easily lead to price manipulation, speculation, etc. Therefore, I think that opening a gold exchange is necessary to create a centralized, transparent market.”

Source: https://laodong.vn/kinh-doanh/can-loai-bo-thoi-quen-gam-giu-vang-ngan-chan-hien-tuong-vang-hoa-1355404.ldo