Transparency, elimination of monopoly, will the market stabilize?

Explaining the reasons for the sharp increase in world gold prices since the beginning of the year, leading to an increase in domestic gold prices, the State Bank pointed out three reasons; the first is geopolitical instability and military conflicts that continue to escalate globally. Among them, the prolonged Russia-Ukraine war, accompanied by sanctions and retaliation between Russia and the West; and the military conflict between Israel and Islamic forces in the Middle East are hot spots causing tension.

Next, many central banks around the world and investment funds have increased their gold purchases to supplement their foreign exchange reserves, thereby creating a large demand in the precious metal market. And finally, the US tariff policy has made investors' psychology "uneasy", promoting the flow of money into safe "haven channels" such as gold.

It should be noted that in 2024, the domestic gold market also had many fluctuations, even revealing shortcomings in the management and operation of the gold market. To overcome this situation, the State Bank has implemented many measures such as bidding for gold bars; selling gold through 4 state-owned commercial banks... These solutions have significantly reduced the difference between domestic and world gold prices, from 20 million to about 4 - 5 million VND/tael.

And this year, in the face of unpredictable and unusual fluctuations in the gold market, on April 18, the Government Office issued a document conveying the direction of Deputy Prime Minister Ho Duc Phoc; accordingly, the State Bank of Vietnam presides over and coordinates with agencies to closely monitor the situation and developments in the financial, monetary, foreign exchange, and domestic and international gold markets to promptly implement solutions according to regulations to stabilize the gold market.

Further strengthen inspection, examination and strict handling of violations according to regulations, prevent profiteering, manipulation, price fixing, speculation... in the gold market in accordance with the direction of the Government leaders in Official Dispatch No. 1483/VPCP-KTTH dated April 4, 2025. At the same time, the State Bank proactively implements communication measures to stabilize social psychology.

Given the current developments in the gold market, these measures are necessary. However, an expert said that we cannot rely solely on administrative orders, even though they can help cool down the gold price temporarily. Administrative measures are only temporary measures; the important issue is the supply-demand problem that needs to be solved.

To do this, it is necessary to allow gold trading enterprises to import gold. In addition, it is necessary to amend Decree 24 to allow reputable and financially capable enterprises to import and trade gold according to the criteria and directions of the State Bank.

Another opinion also holds that, in the current context, stabilizing the gold market is very difficult, because the principle of stability requires supply. The immediate solution can only be to use administrative measures to regulate the market, thereby reducing the price gap with the world market to the lowest level, while limiting the trend of investing and hoarding gold.

In the long term, the most important and sustainable solution is for the management agency to consider removing the monopoly on gold imports. If the supply increases to meet market demand, the domestic gold price may decrease. In addition, it is necessary to consider the establishment of an official gold trading floor to help connect domestic and international gold prices, creating conditions for gold to be traded transparently and legally.

Ninh Ha

Source: https://daibieunhandan.vn/minh-bach-bo-doc-quyen-thi-truong-se-on-dinh-post411589.html