Auction fails to solve “dancing” gold price

The phrase “dancing gold price” was used by Vice Chairman of the National Assembly Tran Quang Phuong when talking about the gold market, when the National Assembly Standing Committee gave its opinion on the supplementary assessment report on the results of the implementation of socio -economic development tasks and the State budget in 2023, and the implementation situation in the first months of 2024, on May 13.

Originally, Vice Chairman of the National Assembly Tran Quang Phuong said: "We can't just let it dance like that. Any market is a market, but it can't have a market that dances like that. I've never seen a market where the price of gold increases and decreases so dramatically."

Recently, the Government and the Prime Minister have continuously issued directives on the management and stabilization of the gold market. Most recently, in the announcement concluding the meeting on fiscal policy, monetary policy, gold market, exchange rate, and interest rate on May 18, Prime Minister Pham Minh Chinh requested the State Bank to complete the inspection of the gold market in May.

"Strictly handle violations of legal regulations in gold production and trading. In case of signs of law violations, promptly transfer the case to the Ministry of Public Security and relevant agencies as prescribed," the Prime Minister requested.

Gold prices have been dancing wildly recently, despite the Prime Minister's instructions.

Notably, the State Bank has implemented solutions to stabilize the gold market through gold bar auctions to increase supply in the market. From April 19 to now (May 20), this agency has organized 8 SJC gold bar auctions with a total winning volume of 35,100 taels.

It must be recognized that a series of solutions continuously directed by the Government and the Prime Minister have somewhat "stabilized" market sentiment, but the results have not been as expected.

In the hallway of the National Assembly, talking to Nguoi Dua Tin , National Assembly Deputy Trinh Xuan An (Dong Nai delegation) said that currently Vietnam does not have a true "gold market" and price management must be very calm, and there must be a clear viewpoint on gold.

“I do not use the term “gold market” because we do not have a real market. We should not, because of the needs and psychology of a small group in society who want to hoard, trade gold, and seek profits from gold bars, take actions that are not market-oriented. In particular, we should not encourage the transformation of gold bars into a commodity,” said Mr. An.

According to National Assembly member Trinh Xuan An, this is a conditional business and gold is a special object. Therefore, it is necessary to calculate very carefully and have a more systematic management mindset, not to act hastily, not to follow the needs and psychology of a small group in society.

National Assembly Deputy Trinh Xuan An said that we must consider whether the monopoly of gold and the sale of SJC is correct or not?

Mr. An also said that it is necessary to study and recalculate the current monopoly of gold bars by brand, to avoid smuggling and dependence on a few distributors.

“The government is giving very close guidance. In my opinion, the right direction is to summarize and evaluate very carefully to revise Decree 24. We must consider whether the monopoly of gold and the sale of SJC is correct or not? Auctioning to bring down the gold price is also not a good solution. Because in reality, auctioning cannot solve the problem of fluctuating gold prices,” said Mr. An.

According to the analysis of the National Assembly delegate from Dong Nai, if we consider it a gold market, we must consider what the market depends on, must return to the rules of the market, must have supply and demand, must have factors that make up the price with the universal nature of the market rules.

Therefore, Mr. An believes that if this is an unencouraged item or if it is too complicated to manage, then firstly, let the market regulate it and secondly, discourage the form of trading and owning gold bars.

Delegate Trinh Xuan An expressed the need to be cautious, carefully evaluate the operating methods and properly manage gold bars in current conditions.

“Of course, we have to calculate the roadmap. Personally, I think that if necessary, we can completely ban the trading of gold bars. We cannot turn gold bars into a storage tool, because it greatly affects the exchange rate, foreign exchange and affects macro-regulation and management. This disrupts the economy. We should let the market regulate and manage it as a conditional business. The State should not spend a large amount of foreign currency importing gold to stabilize prices,” Mr. An stated his opinion.

Mr. Phan Duc Hieu - Standing Member of the Economic Committee of the National Assembly.

Also talking about the situation of "dancing" gold prices, Mr. Phan Duc Hieu - Standing Member of the National Assembly's Economic Committee said that this is one of 9 economic content groups that the Committee has recommended the Government pay attention to.

Mr. Hieu affirmed that to stabilize the gold market, there must be a comprehensive, long-term solution, not a short-term one. According to him, gold prices have been fluctuating continuously recently. Therefore, in terms of immediate management, it is necessary to closely follow the market. However, the fundamental solution is still institutions and policies.

“In the review report, the Economic Committee recommended that the Government urgently and comprehensively review the gold market management policy mechanism to make timely amendments in the long term, not in the short term. This is also one of the 9 groups of contents that the National Assembly's Economic Committee requested the Government to pay special attention to in managing the socio-economy in general and the gold market in particular,” informed Mr. Phan Duc Hieu .

Source: https://www.nguoiduatin.vn/dbqh-trinh-xuan-an-dau-gia-khong-giai-quyet-duoc-gia-vang-nhay-mua-a664578.html