Eliminate gold bar monopoly, when will the price decrease?

According to experts, if the monopoly on gold bars is eliminated, in the short term, gold prices will not be able to decrease immediately but will need a certain delay.

Mr. Nguyen Quang Huy - CEO of the Faculty of Finance and Banking (Nguyen Trai University) commented that in the short term, gold price Domestic gold prices are unlikely to decrease immediately. Because trust in the SJC gold bar brand is still high, new brands will need time to prove their quality and liquidity.

“ The psychology of taking refuge when the world gold market fluctuates, combined with limited domestic physical supply, will keep prices high. In the medium and long term, when there is more supply from banks and businesses, the gap between domestic and world prices will gradually narrow, reducing the market situation of ‘domestic prices being one and a half times higher than foreign prices’. However, this process will take 12-24 months, or even longer, to operate smoothly ,” Mr. Huy noted.

According to Mr. Huy, the abolition of the monopoly on gold bar production is a major turning point, opening up a competitive mechanism instead of the SJC brand being "alone in the market".

" With this regulation, when more commercial banks and businesses are eligible to participate, the supply of gold bars will gradually improve, creating a foundation for the market to be less distorted, more transparent and closer to international prices ," said Mr. Huy.

However, according to Mr. Huy, this is a long-term impact, and in the short term the market cannot change immediately because the licensing, production and trust-building processes require a delay.

According to experts, in the short term, gold prices will not be able to decrease immediately. (Photo: Minh Duc).

Meanwhile, gold expert Tran Duy Phuong said that Decree No. 232 of the Government will take effect in more than a month. It can be predicted that this is the process to prepare for the birth of a detailed guiding circular, and also the time for relevant units to have necessary calculations and preparations.

According to this expert, only when businesses can import raw gold, produce gold and increase supply to the market, will the gold market be clearly impacted and truly "cool down".

“ From the beginning of November onwards, there is a high possibility of strong fluctuations in the gold market. It is forecasted that the difference in gold price from nearly 20 million VND/tael can quickly decrease to 12-13 million VND/tael ,” Mr. Phuong predicted.

Regarding the possibility of domestic gold prices falling to 100 million VND/tael, Mr. Phuong said that with the world gold price at 3,370 USD/ounce, the equivalent is about 114 million VND to 115 million VND per domestic tael.

For the price of gold in Vietnam to drop to 100 million VND, the world price needs to drop by about 300 USD to the range of 3,000 USD/ounce to 3,050 USD/ounce.

“ The decisive factor is still the development of international gold prices ,” he emphasized.

According to him, there are many factors that can pull down the world gold price, such as the geopolitical situation has become more stable, and trade negotiations between the US and its partners are gradually coming to completion.

" Investors should consider spending money to buy gold when the difference between world and domestic gold prices is only about 5-7 million VND/tael, this is a suitable difference ," Mr. Phuong advised.

Many measures need to be taken to increase supply.

Dr. Nguyen Tri Hieu, economic expert, the gold market will have many changes in the coming time, on the condition that the decree must be implemented quickly, not just exist on paper.

According to him, if there is no specific action, such as a declaration, SJC gold brand No longer a national gold brand, or the State Bank allowing some commercial banks and businesses to import gold... the gold market has not changed much.

He analyzed that with the new regulation, the domestic gold price may decrease by about 5-10 million VND/tael, but only if the world gold price remains unchanged. If the world gold price continues to increase, the domestic price will also increase.

In addition, in the coming time, the management of the gold market also needs to be strengthened when many gold bar products appear. For a long time, the management responsibility has mainly been undertaken by the State Bank. However, gold is essentially a precious commodity, not a currency, so it is not subject to monetary policy and is not under the direct management authority of the State Bank.

Therefore, in the future, it is possible to consider establishing a specialized agency to manage the gold market, separate from the State Bank. This agency will be responsible for stabilizing prices, regulating supply and demand, narrowing the gap between domestic and world gold prices, controlling transactions, preventing smuggling, and supervising all gold trading activities.

Meanwhile, Associate Professor Dr. Nguyen Huu Huan (Ho Chi Minh City University of Economics) said that to produce gold bars, businesses need a source of raw gold, which means the State Bank must issue an import quota. Whether this quota fully meets domestic demand or not will be the key factor in determining the ability to narrow the gold price gap.

“ Eliminating monopoly is necessary, but not enough. To stabilize the gold market, there must be more synchronous solutions, especially addressing the root cause of the gold supply problem ,” Mr. Huan emphasized.

In addition, Mr. Huan also said that Vietnam needs to develop gold exchanges in international financial centers that are being prepared for construction. Gold exchanges will help reduce speculation by shifting trading activities from physical gold to financial transactions, thereby limiting the need to hold real gold.

In addition, Mr. Huan also proposed mobilizing gold from the people through tokenization or issuing gold certificates. People depositing gold in the system will receive low interest rates (about 0.5-1%/year) but safely, and the State can use this resource for development investment. To protect the value, the State Bank needs to apply derivative instruments to prevent the risk of gold price fluctuations.

Gold expert Tran Duy Phuong also said that only when businesses can import raw gold, produce gold and increase supply to the market, will the gold market be clearly affected and truly cool down.

Source: https://baolangson.vn/xoa-doc-quyen-vang-mieng-khi-nao-gia-se-giam-5057660.html