Unleashing the gold market will narrow the price gap

Mr. Huynh Trung Khanh, senior advisor to the World Gold Council (WGC) in Singapore, Indonesia, Thailand and Vietnam.

The Vietnam Gold Trading Association (VGTA) has commented on the Draft Amendment to Decree 24/2012/ND-CP. If approved, how will the amendments in the Draft impact the gold market, sir?

According to the Draft Amendment to Decree 24/2012/ND-CP, the State Bank of Vietnam (SBV) will remove the monopoly on SJC gold bars, grant quotas to some jewelry businesses to import raw gold and no longer manage the production of gold bars. At the same time, the SBV will no longer control gold jewelry, but will transfer it to the Ministry of Industry and Trade .

Gold jewelry is considered a commodity, not a conditional business item. Therefore, it is reasonable to let the Ministry of Industry and Trade manage it. The entire Vietnamese market currently has nearly 10,000 gold shops, while Thailand only has about 6,000 gold shops.

In my opinion, jewelry businesses should decide on the import and export of raw gold to be proactive in jewelry production and trading. However, the State Bank of Vietnam’s decision to allow banks to participate in gold production and trading is unreasonable, confusing and creates more licenses….

Regarding gold trading floors, the Draft Amendment to Decree 24/2012/ND-CP still mentions in general terms, not clearly stating which ministries or sectors are responsible for management. Meanwhile, the General Secretary 's direction clearly states 3 options and models for establishing gold trading floors, thereby narrowing the gap between domestic and world gold prices.

According to you, is it necessary for Vietnam to establish a National Gold Exchange?

The establishment of a National Gold Exchange is necessary because according to research and reports from the World Gold Association, the Vietnamese market consumed about 55.3 tons of gold in 2024 and about 28 tons in the first 6 months of this year. Meanwhile, last year, Thailand consumed 48 tons of gold, Indonesia about 45 - 46 tons of gold.

In general, according to the assessment of the World Gold Council, Vietnam is a large gold consumer in the ASEAN region. Therefore, the establishment of a gold trading floor is necessary, it is important to study in what form. Members trading gold accounts through the gold trading floor can be about 10 units, including some banks and gold trading companies with brands in the market.

If the above measures are implemented, the domestic gold price will be brought closer to the international price. In fact, during the time the State Bank of Vietnam intervened in selling gold, the gap between domestic and international gold prices narrowed, but then increased again. Currently, the international gold price converted according to the exchange rate listed at the bank is only about 105 - 107 million VND/tael, but the domestic price is still 117 - 120 million VND/tael.

Will there be another big "wave" in gold prices in the near future, sir?

The fluctuations of the gold market are partly related to the roadmap to reduce USD interest rates of the US Federal Reserve (Fed). Recently, in the face of the US economic situation, the Fed has not cut USD interest rates further, but with the determination of US President Donald Trump, the Fed Chairman is likely to cut interest rates 1-2 more times in the remaining time of 2025, which will have a positive impact on gold prices.

Regarding the geopolitical situation, Israel and Iran have ceased fire, but it has only temporarily calmed down, the Middle East "furnace" is still hot. Central banks around the world continue to buy gold at about 1,000 tons/year.

Notably, in the third and fourth quarters of each year, the demand for physical gold and gold jewelry often increases. These are factors that positively affect gold prices in the coming time, the world gold price may reach 3,700 - 4,000 USD/ounce.

Source: https://baodautu.vn/coi-troi-thi-truong-vang-se-thu-hep-chenh-lech-gia-d324111.html