Explaining the record breaking gold price increase

This content is mentioned in the State Bank's report to the National Assembly regarding the implementation of the resolution on questioning in the banking sector.

Referring to the gold market, the State Bank said it will soon amend Decree 24/2012 on gold market management according to simplified procedures.

This unit will also coordinate with relevant ministries (Ministry of Public Security, Industry and Trade, Finance) to strengthen inspection and examination of the activities of gold trading enterprises, stores, distribution agents and gold bar trading, in order to promptly detect loopholes and violations for strict handling.

For more information, the State Bank said that in 2024, it coordinated with ministries and functional agencies to inspect four large enterprises SJC, DOJI, PNJ, Bao Tin Minh Chau and two banks TPBank and EximBank on gold trading activities.

The State Bank gave many reasons for the high price of SJC gold bars (Photo: Manh Quan).

The inspection took place in the context of gold prices at that time continuously increasing, the gap with world prices widening even though the management agency conducted bidding to increase supply.

This unit has also transferred information about the inspection results to the competent authority for verification, investigation, and handling according to regulations and is finalizing the inspection conclusion.

The State Bank's report shows that by the end of 2024, the difference between domestic SJC gold bar prices and world prices will be controlled, but at the beginning of this year, world gold prices continuously broke previous records.

According to the State Bank, the reason for the increase in world gold prices is mainly due to political instability, military conflicts, and increasing strategic competition globally, causing world gold prices to skyrocket.

Many central banks and investment funds are increasing their gold purchases to supplement foreign exchange reserves, which is also an important reason for the increase in gold prices.

In addition, US President Donald Trump's announcement of high reciprocal tariffs with countries around the world, according to the State Bank, also negatively impacted investor sentiment and world economic growth, causing investors' cash flow to tend to flow into gold.

Explaining the reason why the domestic price of SJC gold bars has increased rapidly and the difference has increased sharply since the beginning of April, the State Bank said this was due to the expectation that world prices would continue to increase in the context of US tariff policies expected to negatively impact the global economy, the Fed's unpredictable monetary policy roadmap, tense global geopolitical developments, and commodity price shocks.

Another reason is that the supply of gold bars on the market has not increased since the beginning of the year. In addition, it cannot be ruled out that some businesses and individuals are taking advantage of market fluctuations to speculate, inflate prices, and profit.

According to the State Bank, the high gold price has not yet affected the management of monetary policy and macroeconomic stability, but the gold market is still not truly stable and sustainable, still affected by psychological factors, expectations, and potential risks affecting the currency and foreign exchange markets.

To stabilize the gold market sustainably, the State Bank believes that there needs to be synchronous participation of ministries, branches and localities, following the direction of the Government and Prime Minister.

Source: https://dantri.com.vn/kinh-doanh/ly-giai-viec-gia-vang-tang-pha-vo-ky-luc-20250506130032559.htm