In a report sent to National Assembly deputies at the 8th Session of the 15th National Assembly, the State Bank of Vietnam (SBV) said that from the beginning of 2024 to June 2024, the gap between domestic and world gold prices will widen, especially for SJC gold bars.

The difference in the price of SJC gold bars compared to the world gold price at times reached 18 million VND/tael (May 2024). On the morning of November 5, the price of SJC gold bars was traded at 87-89 million VND/tael, an increase of 13.5 million VND/tael (about 18%) compared to the beginning of 2024.

Besides psychological and expectation factors, the State Bank believes that it cannot rule out the possibility of market manipulation, violations of relevant regulations of the law on tax, competition, etc., leading to a high difference between domestic gold prices (especially SJC gold) and world prices.

During the 10 years from 2014 to 2023, the State Bank did not increase the supply of SJC gold bars to the market. However, from April 2024 to present, this agency has intervened in the gold market through bidding and direct sales of gold bars to supplement the supply of SJC gold bars to the market, limiting the impact on the macro economy, currency, and foreign exchange.

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The gap between domestic and international gold bar prices has narrowed. Photo: Minh Hien.

After 9 auctions with a total winning volume of 48,500 taels (equivalent to about 1.82 tons), from June 3, the State Bank switched to selling gold bars directly to people through 4 state-owned commercial banks and SJC Company.

As a result, from June 3 to October 29, the State Bank organized 44 direct sales of SJC gold bars, supplying the market with 305,600 taels of SJC gold (equivalent to about 11.46 tons of gold).

Before the State Bank announced the policy of selling SJC gold bars directly, the difference compared to the world price was more than 18 million VND/tael (about 25%). Since the official announcement of the direct sale of gold bars, the difference between the domestic gold bar selling price and the world price has decreased, currently only about 3-5 million VND/tael different compared to the world gold price (about 5-7%).

The State Bank also strengthens inspection work, coordinates with functional agencies in provinces and cities (Market Management Department, Department of Science and Technology, Police...) to inspect units with gold trading activities, thereby rectifying these activities.

On May 17, the State Bank of Vietnam issued a decision to inspect 6 credit institutions and enterprises with gold trading licenses regarding their compliance with legal policies in gold trading activities, including representatives from the Ministry of Public Security, the Government Inspectorate, the Ministry of Industry and Trade (General Department of Market Management) and the Ministry of Finance (General Department of Taxation).

The inspection contents include: Inspection of compliance with legal regulations on gold trading activities; inspection of compliance with legal regulations on anti-money laundering; inspection of compliance with legal regulations on accounting regime, preparation and use of invoices and documents; and on declaration and performance of tax obligations.

In the coming time, the State Bank will consider intervening in the gold market (if necessary) with appropriate volume and frequency to stabilize the market and monetary policy goals.

In addition, coordinate with relevant ministries and branches to carry out inspections and examinations of the activities of gold trading enterprises, stores, gold bar distribution and trading agents and other entities participating in the market; promptly detect loopholes and shortcomings for handling.

The State Bank will also review the implementation of Decree 24, propose amendments and supplements in accordance with the practical situation, contributing to preventing the goldification of the economy, not allowing gold price fluctuations to affect exchange rates, inflation and macroeconomic stability.