In the first months of 2024, in the face of continuous fluctuations in gold prices, the Government and the State Bank of Vietnam (SBV) have continuously given close instructions to stabilize the gold market.
Recently, the State Bank of Vietnam has organized 9 auctions, supplying the market with 48,500 taels of SJC gold, equivalent to more than 1.8 tons of gold. However, the difference between the domestic price of SJC gold bars and the world price of gold remains high, at over 20%.
Therefore, the State Bank of Vietnam has announced to stop bidding for gold bars, instead selling gold directly to 4 State Commercial Banks (SCBs) namely Vietcombank, VietinBank, BIDV and Agribank, so that these banks can sell gold directly to the people from June 3. The goal is to soon narrow the gap between domestic and international gold prices to a suitable and sustainable level.
In the market, right after the information from the State Bank, this morning (May 30), the domestic gold price dropped sharply by nearly 3 million VND/tael in the selling direction.
Specifically, at Saigon Jewelry Company, SJC gold price decreased by 3.8 million VND/tael for buying and 2.3 million VND/tael for selling compared to the previous session, listed at 84.5 million VND/tael for buying and 88 million VND/tael for selling.
At DOJI, the price of SJC gold bars was listed at 84.5 million VND/tael for buying and 87 million VND/tael for selling, down 3.8 million VND/tael for buying and down 2.9 million VND/tael for selling compared to the previous session.
Mr. Huynh Trung Khanh, Vice President of the Vietnam Gold Trading Association (VGTA), commented that although the domestic gold price has decreased, it is still quite different from the international gold price.
At the same time, the decrease in gold prices is normal due to psychological issues. Some investors who previously held a lot of gold bars, fearing that the price of gold bars will decrease, sold them to buy cash and gold rings.
Speaking with Nguoi Dua Tin , Dr. Nguyen Minh Phong, former Head of Economic Research Department, Hanoi Institute for Socio-Economic Development Studies , said that the State Bank's decision to sell gold to state-owned banks was timely and courageous.
Dr. Nguyen Minh Phong, former Head of Economic Research Department, Hanoi Institute for Socio-Economic Development Studies.
Mr. Phong said that, in principle, to effectively sell gold directly to people through state-owned banks, it is necessary to exploit the network system across the country, expand transaction points, give people freedom in transactions and convenience in choosing where to buy.
At the same time, the selling price must be very low. The government should not consider selling as a business to make profit, but should prioritize the goal of stabilizing psychology and bringing domestic prices closer to the market.
“We need to choose a price that can immediately cause a price “shock”, so that people stop buying. We need to boldly set the lowest price possible, just ensuring the source of expenses to create pressure on the market, forcing those who are holding gold to sell, helping the State reduce gold imports”, Mr. Phong emphasized.
In addition, it is necessary to regulate that banks cannot sell more than a certain percentage, and there should be no monopoly on low prices and high prices. And finally, the import of raw materials for gold jewelry production should be liberalized to increase supply.
Sharing the same opinion with Mr. Phong, Mr. Khanh commented that the State Bank's direct sale of gold through four state-owned banks is a positive sign, contributing to increasing the supply of gold bars to the market.
However, according to Mr. Khanh, the sale of gold through four state-owned banks still needs to be put into practice to see clear results.
“How much difference will the State Bank sell gold compared to the international gold price? Will the amount of gold that the State Bank supplies to state-owned banks be enough to meet market demand?
What is the distribution price for state-owned commercial banks? How do state-owned banks buy back from the State Bank and then sell? What is the profit margin? I think the State Bank will set the margin so that the profit is not too high,” Mr. Khanh shared.
In addition, Big4 banks selling gold directly to people will not affect the gold and jewelry business group because they still have their own customers and still buy and sell gold at the main price, which is the state-owned price.
On the afternoon of May 29, after the socio-economic discussion, Governor of the State Bank of Vietnam Nguyen Thi Hong explained and clarified the opinions raised by National Assembly deputies.
Regarding the gold market, Governor Nguyen Thi Hong said that high gold prices and complex fluctuations are common developments in countries around the world, not just in Vietnam.
Domestically, gold prices fluctuated and moved in the same direction as world gold prices. However, the gap between domestic and international gold prices widened, especially for SJC gold.
"Narrowing the gold price gap is a very challenging task. Because we are doing it in a context where international gold prices are constantly fluctuating and are complicated," Ms. Hong said, adding that the State Bank has increased the supply of gold to the market and conducted bidding.
The bidding method was inherited from 2013 with the expectation of increasing the supply of gold to the market and the price also gradually decreasing. However, after 9 bidding sessions, the price difference did not decrease as expected, so the bidding was stopped.
The State Bank has assessed the situation, found out the causes and built a new plan, which will begin implementation next week to reduce the gold price difference in the coming time .
Source: https://www.nguoiduatin.vn/chuyen-gia-hien-ke-tao-cu-soc-tren-thi-truong-vang-a666062.html
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