Gold market faces important turning point

Things to do immediately to stabilize the gold market

Recently, the issue of the constantly increasing price of gold, as well as the fact that having money does not necessarily mean you can buy gold, has been a topic of public interest.

Not only those who need to buy gold but also those observing the situation are somewhat worried when gold prices continuously reach new peaks, while supply is scarce.

The "knot" in the gold market will be untied. Photo: HT

Working with the Central Policy and Strategy Committee on mechanisms and policies for effective management of the gold market, General Secretary To Lam gave directional instructions, which are considered urgent and practical measures to stabilize the gold market.

That is to complete the legal framework, quickly amend Decree No. 24/2012/ND-CP in the direction of marketization with a roadmap and strict control, eliminating the monopoly of gold bars on the principle that the State still manages the production of gold bars, but can grant licenses to many qualified enterprises to participate, in order to create an equal competitive environment, thereby helping to diversify supply sources and stabilize prices.

Encourage the development of the domestic gold jewelry market to gradually turn Vietnam into a center for manufacturing and exporting high-quality gold jewelry; develop attractive alternative investment channels to mobilize gold from the people into the economy .

Promote the role of gold business associations, act as a bridge between gold businesses and management agencies, promptly reflect difficulties, make recommendations and coordinate the implementation of market stabilization measures when necessary; study the establishment of a national gold exchange; or allow gold to be traded on commodity exchanges.

Positive signal for the market

In response to the above orientations, the Vietnam Gold Business Association as well as financial experts all assessed that removing the monopoly on gold bars will help the gold market stabilize in the long term, not become unstable as in the past.

Gold expert Tran Duy Phuong believes that the above directions will help to remove bottlenecks in the gold market. He suggests that the State should expand the right to control imports to increase gold supply, helping to connect domestic and world gold prices.

If the gold shortage continues, Vietnam's gold price will remain much higher than the world price, causing gold smuggling to continue.

Financial expert Le Xuan Nghia believes that businesses that want to monopolize and manipulate prices thanks to their monopoly on gold bars will no longer exist, as domestic gold prices closely follow fluctuations in the world market.

Financial expert Nguyen Quang Huy said that people's financial knowledge will be improved, people will not only know how to store gold in safes, but will also know how to balance between gold assets, investments in stocks, bonds and startups. At that time, the gold market will truly have a place in the modern economy.

According to National Assembly delegate Hoang Van Cuong (Hanoi delegation), Decree No. 24/2012/ND-CP has effectively eliminated the use of gold as a payment unit, fighting against the goldification of the economy. However, the monopoly of gold bars has led to limited supply to the market, causing the price of gold to increase.

Delegate Cuong realized that currently, the economy is no longer at risk of goldification, so there is no need to maintain a monopoly on the production and import and export of gold bars. Instead, capable and reputable businesses should participate to increase the competitiveness of the gold market.

Delegate Tran Anh Tuan (Ho Chi Minh City delegation) also supported the above viewpoint, helping to stabilize gold prices, control and limit gold bar smuggling across the border.

Mr. Tran Anh Tuan said that currently, the production, distribution, consumption and import of gold bars are all under control. This is not in accordance with market principles, causing difficulties in handling and resolving the difference between domestic and international gold prices as well as gold bar smuggling.

Mr. Tran Anh Tuan proposed that the State should create conditions for many gold trading enterprises to be licensed to import according to their capacity, creating an abundant supply and creating a price level equal to the world. At the same time, gradually removing obstacles for the gold bar market to circulate smoothly like other goods, will create an abundant supply, overcoming the current obstacles in the gold market.

Source: https://hanoimoi.vn/thi-truong-vang-dung-truoc-buoc-ngoat-quan-trong-704622.html