Increase gold imports
In recent times, the domestic and international gold markets have been constantly evolving in a complex manner, with domestic gold prices fluctuating strongly, increasing rapidly, and having a high difference with international prices.
Last week, domestic gold prices recorded a continuous and rapid increase. At the beginning of the week, gold prices "skyrocketed" when the selling price of SJC gold bars was 82.3 million VND/tael, the price of gold rings also increased sharply, exceeding 75 million VND/tael.
By April 9, SJC gold bars continued to increase to VND83.72 million/tael, an increase of VND1.4 million/tael. On April 10, investors continued to witness the price of SJC gold climb by more than VND1 million/tael, to VND84.4 million/tael. At the end of the afternoon session on April 11, domestic gold prices were still recorded at the peak at VND84.4 million/tael.
On April 12, immediately after the State Bank announced a solution to stabilize the gold market, the domestic price of SJC gold decreased by VND500,000 per tael, to VND84.5 million per tael. Accordingly, the State Bank said it would increase the supply of gold bars to handle the high difference between domestic and world prices.
Speaking to Nguoi Dua Tin , Mr. Huynh Trung Khanh - Vice President of the Vietnam Gold Business Association pointed out the reasons why domestic gold prices have continuously broken the peak in recent times. Accordingly, the first factor affecting domestic gold prices is the increase and decrease of world gold prices.
Currently, the geopolitical situation is tense, geopolitical and economic instability, the international gold price is increasing rapidly, leading to an increase in domestic gold price, due to the domestic market's scarce supply, no domestic gold production source, mainly imported.
In fact, the demand for gold is currently increasing, but not much because gold is at its peak price. However, the lack of supply has led to only a slight increase in demand, which has strongly affected the price.
Therefore, the SBV's proposal to increase the supply of gold bars to reduce the difference in gold prices is appropriate. According to Mr. Khanh, like previous years, the SBV will increase the supply of gold by importing raw gold or producing more SJC gold bars.
Need to remove SJC gold bar monopoly to cut gold "fever"
However, Mr. Khanh also said that over the past 12 years, according to Decree 24, the State Bank has applied strict control measures on gold bar monopoly and import-export monopoly to end the gold market situation.
However, at present, the market has changed. The gold-ization situation has almost disappeared, the monopoly no longer has the positive influence as before, instead, it creates a gap between domestic and foreign gold prices.
Therefore, Decree 24 should be adjusted, the monopoly should be abolished, a few more gold bar brands should be added, and raw gold should be imported to increase the supply of gold to the market. To cut the gold price “fever”, it is necessary to abolish the monopoly on gold production and the SJC gold bar brand.
Since 2012, when Decree 24 was issued, the State Bank has been assigned to organize and manage gold bar production activities. Saigon Jewelry Company Limited (SJC) was chosen as the national gold bar brand.
In addition to the monopoly of SJC gold bars, Decree 24 also does not allow businesses to import raw gold, which has led to a shortage of raw gold for jewelry production. Some businesses even have to use SJC gold to produce jewelry, which has caused the price of SJC gold bars to escalate.
Mr. Huynh Trung Khanh emphasized that after amending Decree 24, the gold market will develop more transparently and sustainably.
Associate Professor, Dr. Dinh Trong Thinh, an economic expert, commented that the amendment of Decree 24 will make the price of Vietnamese gold closer to the world gold price, especially the price of gold bars.
However, regarding the elimination of the SJC gold bar monopoly mechanism, Mr. Thinh said that the State Bank still needs to strictly control the quantity to avoid speculation. At the same time, it is also necessary to meet the legitimate needs of people to accumulate.
At the same time, because gold is related to national reserves and is a conditional business item, it requires close control from management units and authorities.
“The State Bank still needs to strictly manage the gold market because if it does not control the production and import of raw gold, it will increase the possibility of goldification of the economy,” Mr. Thinh said.
Giving a forecast for the domestic gold price in the coming time, Mr. Thinh said that the Vietnamese gold price will be very difficult to predict because it follows the world gold price. Meanwhile, the world gold price is currently increasing according to the psychology and expectations of investors.
Recently, the Government has continuously issued directives on the issue of stabilizing the gold market. On March 19, Deputy Prime Minister Le Minh Khai requested the State Bank of Vietnam to coordinate with relevant agencies to urgently, seriously, fully, effectively and promptly implement the tasks and solutions to stabilize the gold market assigned in the Prime Minister's telegram and directive and the Government Office's official dispatches.
The State Bank of Vietnam must not delay any further, and must promptly summarize the implementation of Decree No. 24/2012 of the Government on the management of gold trading activities.
On the morning of April 12, the Government Office issued Notice No. 160 dated April 11, 2024, concluding the Prime Minister's meeting on solutions to manage the gold market in the coming time.
Accordingly, the Prime Minister requested the State Bank to preside over and coordinate with relevant agencies to strictly implement the provisions of Decree No. 24 dated April 3, 2012 of the Government (Decree 24), including closely monitoring the developments of world and domestic gold prices and according to assigned functions, tasks and authorities.
The Prime Minister requested the State Bank to preside over and coordinate with relevant agencies to enhance the application of information technology and digital transformation in the supervision, management and operation of the gold market.
In addition, continue to research, review, carefully assess the impact, and fully summarize the implementation of Decree 24 to propose appropriate amendments and supplements, ensuring adherence to the Party's policies and guidelines, the Government's and the Prime Minister's directions in managing the gold market, in accordance with the practical situation and economic developments in the country, region, and internationally .
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