Eliminate the monopoly on gold bars: Stabilize the gold market

On May 28, General Secretary To Lam requested to eliminate the State monopoly in gold bar production, allowing more qualified businesses to participate in order to create an environment of equal competition, diversify supply sources and stabilize prices.

Experts say that removing the monopoly on gold bars will help the gold market stabilize in the long term and not become unstable like in the past - Photo: TTD

Thus, after more than a decade, Decree 24/2012, which applies the monopoly on gold bars, has revealed its shortcomings, causing consequences for the economy , especially the situation of gold smuggling and foreign currency outflow. Now the gold market is facing a turning point when the State monopoly on gold bars is about to be abolished.

Why is there a monopoly on gold bars?

Before 2012, there were many domestic gold bar brands such as Phuong Hoang gold bars of PNJ Company, gold bars of Saigon Thuong Tin Commercial Bank (SBJ) Jewelry Company, ACB brand gold bars of Asia Commercial Joint Stock Bank, AAA gold bars of Agribank...

However, the market still favors the SJC gold bar brand the most. Therefore, many companies, even though they have their own gold bar brands, still line up to process gold bars at SJC Company, especially when the market fluctuates strongly.

At that time, the gold market continuously experienced price fevers, causing the exchange rate to fluctuate. Especially with the regulation that banks were allowed to mobilize gold and convert a part of the gold capital into money at that time, it also created conditions for some banks to participate in "bullish and bearish" movements, causing waves in the gold market.

Faced with this reality, in 2012 the State Bank of Vietnam (SBV) made major changes to the gold market. First, SJC became the only national gold bar brand, while other "non-SJC" gold brands were "terminated".

The State Bank also tightened the conditions for granting licenses to buy and sell gold bars, small gold shops were eliminated from the game and were only allowed to trade in jewelry. Gold mobilization and lending activities at commercial banks also ended at the end of November 2012. If people want to deposit gold, banks can only keep it for a fee.

Gold smuggling activities were also prevented because the output of smuggled gold, which was legalized by some units by processing into SJC gold bars, was stopped because the State Bank strictly controlled the production of SJC gold bars. This tightening of output helped the VND/USD exchange rate in the free market decrease and gradually stabilize.

According to experts, in the near future, domestic gold prices will likely "collapse" to be close to world gold prices - Photo: THANH HIEP

Side effects

However, there are also side effects of this policy, especially in recent years. From a difference of only a few hundred thousand to a few million VND compared to the world gold price, the price of SJC gold bars and even jewelry gold sometimes differs by 18 - 20 million VND/tael.

Over the past year, as the world gold price has continuously increased due to geopolitical instability, the domestic gold market has been further challenged as the gold supply has gradually dried up due to many years of not producing more SJC gold bars, while the gold supply has decreased significantly through gold exports in the form of fine art jewelry at times when the domestic gold price was lower than the world gold price.

The gold market experienced an unprecedented phenomenon in 2024 when people lined up for days to buy gold and gold companies had to limit the amount of gold sold to each person to 1 tael of gold bar or 1-2 taels of gold ring due to insufficient supply.

Faced with this reality, the Vietnam Gold Business Association and experts have repeatedly recommended that Decree 24 be quickly amended to "untie" the gold market, while reducing the gap between domestic and international gold prices. At the Government Standing Committee meeting on gold market management last weekend, the Prime Minister also directed to reduce the gap between gold prices to 1-2%.

Will the market have many gold bar brands?

Speaking with Tuoi Tre, Mr. Nguyen Ngoc Trong, director of NPJ Gold Company, said that with the requirement to "eliminate the State monopoly on gold bar brands in a controlled manner", it can be understood that in the future the market will have many gold bar brands like before 2012, not just one SJC gold bar brand like now.

Along with "expanding controlled import rights to increase gold supply", it can be understood that the State will grant a controlled gold import quota, the domestic gold market will have a significant increase in supply, and the situation of queuing to buy gold will also be resolved.

This will help reduce the gap between domestic and world gold prices, and limit gold smuggling across the border.

According to expert Tran Duy Phuong, recently there have been continuous drastic instructions from the State to remove bottlenecks in the gold market. According to him, to reduce the gap between domestic and world gold prices to 1-2% as directed by the Prime Minister at the Government Standing Committee meeting on gold market management, it is certain that the gold supply for the market must be increased.

Most recently, with the direction of General Secretary To Lam on eliminating the State monopoly on gold bars and granting licenses to many qualified enterprises to participate in gold bar production again, there will be many gold bar brands competing with each other to create an equal competitive environment, thereby helping to diversify supply and stabilize prices.

"The most important thing is to expand controlled import rights to increase gold supply. Only allowing gold imports can help connect domestic and world gold prices. Otherwise, domestic gold prices will continue to be high, leading to gold smuggling across the border," Mr. Phuong analyzed.

According to Mr. Phuong, the difference in domestic and international gold prices will have to decrease, and then people's psychology will be relieved.

In the past, due to the scarcity of gold supply, when the world gold price increased once, the domestic gold price increased 2-3 times, and when the world gold price decreased, the domestic gold price did not decrease, thus further strengthening the psychology of buying and hoarding gold of the people, creating instability in the market.

"When the State is determined to untie the knot in the gold market, people's psychology will be more stable, they will no longer focus on investing in gold like in the past and smuggled gold will no longer have a place to survive," expert Tran Duy Phuong added.

According to Mr. Phuong, it may take a few months to amend policies for the gold market, but the above decisions have created confidence in the market.

If the monopoly on gold bars is abolished and gold imports are allowed, the domestic gold market will no longer be as chaotic as it is now but will be stable in the long term. The gold market will not only have "input" but also "output" if import-export policies are flexible.

The mechanisms and policies for managing and regulating the gold market have been slow to be renewed, failing to keep up with the development of the market and the demands of reality, and need to be urgently renewed and improved. The gold market is poorly managed, not in line with the general supply and demand developments in the world market, causing consequences for the economy, especially the situation of gold smuggling and foreign currency outflows.

General Secretary To Lam

Some strategic directions of General Secretary To Lam:

- Complete legal documents, soon adjust Decree 24/2012.

- Eliminate the State monopoly in gold bar production, allowing more qualified businesses to participate.

- Expand controlled gold import rights.

- Develop alternative investment channels to mobilize gold from the population.

- Research the establishment of a national gold exchange or allow this commodity to be traded on the commodity exchange.

- Research on applying tax to gold trading transactions to increase transparency.

- Research on eliminating export tax on gold jewelry and fine art.

- Building information and data systems on the gold market.

No more unreasonably high spreads

The news that the monopoly on gold bars will be removed, combined with the world gold price falling below the threshold of 3,300 USD/ounce, caused the price of SJC gold bars on May 29 to decrease by 1.5 million VND/tael in the morning, to 117.2 million VND/tael (sell) and 114.7 million VND/tael (buy).

The price of 9999 gold rings also dropped sharply to 110 million VND/tael (buy) and 113 million VND/tael (sell), down 1 million VND/tael compared to the end of May 17.

However, the price of SJC gold bars then rebounded and closed at 118 million VND/tael (selling) and 115.5 million VND/tael (buying). Compared to the converted world gold price, the price of SJC gold bars is 14.3 million VND/tael higher while the price of 9999 gold rings is 11.8 million VND/tael higher.

With the removal of the gold bar monopoly, the market is expecting that the price of SJC gold bars will no longer have an unreasonably high difference as it does now.

SJC wants fair competition

After nearly 13 years of applying Decree 24, the gold market is facing a turning point when the State monopoly on gold bars is about to be eliminated - Photo: THANH HIEP

At many previous meetings, in response to opinions that SJC Company benefits from a monopoly or that SJC Company "manipulates" the price of gold, SJC Company's leaders have repeatedly denied it.

According to the leader of SJC Company, since 2012, the SJC brand has been selected by the Government and the State Bank as the national gold brand. The production of gold bars is strictly managed by the State Bank in all stages of the process, starting from weighing the product, checking the series, burning and stamping out gold bars.

Regarding the gold price on the market, the leader of SJC Company also affirmed that he is not the one manipulating or fixing the price. Because the gold price is determined by the supply and demand of the market, no unit can proactively set the price on the market.

In reality, in the market, credit institutions and gold trading enterprises may have the right to refuse to buy and sell, but because SJC has been selected as the national gold bar brand, SJC must fulfill all buying and selling needs in the market.

According to the leader of SJC Company, the amount of gold on the market is still very small because there are years and times when the price of raw materials and SJC gold is lower or equal, domestic brands melt SJC gold bars to produce rings and jewelry.

In particular, in 2019, the gold market exported a lot abroad, so the amount of SJC gold on the market is currently very small. The current supply is not available, while the market demand is there, thus creating a price difference compared to world gold.

"If in the future other brands can stamp gold bars, it will be a good thing. Companies with prestige and quality will be chosen by the market and people. SJC always wants fair competition" - SJC leader said.

What to do to remove the monopoly on gold bars?

Delegate HOANG VAN CUONG (Hanoi):

Maintaining the monopoly on gold bullion is no longer necessary.

The issue of monopoly on gold bar brands was born under Decree 24/2012 to combat the goldification of the economy.

However, up to now, people buy, sell and transact with money, not gold. Therefore, maintaining the monopoly on gold bars according to Decree 24 is no longer necessary.

However, gold is a special type of stored asset, not a normal commodity.

Gold trading has a great influence on foreign currency and this is a valuable asset so it must be controlled for quality and reliability to avoid fraud.

Therefore, the monopoly must be eliminated, but the State must manage (use regulations, norms, standards, tax policies to control, open new business methods for trading through the floor, have many mobilization channels...) and research to only allow qualified units to trade in gold bars.

Delegate TRAN ANH TUAN (HCMC):

Create conditions for businesses to import gold more widely.

I completely agree with the direction of General Secretary To Lam on eliminating the monopoly on gold bars.

This policy should have been implemented a few years ago. Controlling gold bars from import to distribution and consumption is not in accordance with market principles, causing difficulties in resolving the difference between domestic and world gold prices and gold smuggling.

Therefore, it must be handled according to market principles, creating conditions for wider imports, according to the capacity of enterprises to create abundant supply, creating balance with world gold prices.

In addition, from the direction of the General Secretary, it is also necessary to consider allowing businesses that meet the prescribed conditions to expand the production of gold bars. At the same time, remove obstacles so that the gold bar market can circulate smoothly like other goods, thereby creating an abundant supply.

Delegate TRINH XUAN AN (Dong Nai):

Don't turn gold into a haven for money.

To implement the General Secretary's direction on abolishing the controlled monopoly on gold bars, it is necessary to amend Decree 24 in the direction of abolishing the monopoly on gold bars.

This solution means that the State still manages the production of gold bars, but can license many qualified enterprises to participate in importing, mining, processing and trading gold.

Besides, gold should not be turned into a shelter for money sources, an underground transaction asset for money laundering, and gold bars should not be encouraged to be turned into a hoarded asset.

I strongly agree with the solution to study the establishment of a national gold exchange as proposed by General Secretary To Lam. This exchange is not a spontaneous exchange like before, nor is it a virtual gold exchange, but must ensure the factors of publicity, transparency and control of origin. As a market, it must accept the rules of the market, the origin of products must be clear, avoid money laundering and be a shelter for illegal activities.

ANH HONG - THANH CHUNG - TIEN LONG

Source: https://tuoitre.vn/xoa-bo-doc-quyen-vang-mieng-on-dinh-thi-truong-vang-2025053008402422.htm