What does the gold market experience?
Associate Professor, Dr. Ngo Tri Long - an economic expert, assessed that from 2022 onwards, the domestic gold market has revealed limitations, gold prices have fluctuated abnormally, even peaking at 92.4 million VND on April 11. May 10, 2024.
According to Associate Professor Dr. Long, there are many causes leading to the above situation, but mainly domestic causes. Firstly, due to the imbalance between supply and demand, when demand increases, limited supply pushes up gold prices. For more than 10 years, gold businesses have not been allowed to import gold , while the State Bank has the monopoly on importing raw gold and has only one brand of SJC gold bars. In addition, Vietnamese people have a habit of buying gold to hoard, especially when the economy is still facing many difficulties.
Second, traditional investment channels such as stocks and real estate are becoming uncertain and unattractive, and savings interest rates are continuously falling. At this time, speculative groups seek to push up the price of gold and crowd psychology is easily attracted by the "wave".
Third, Vietnam's gold market lacks a centralized trading place; instead, many small-scale gold shops and traders operate. This fragmentation creates price transparency and creates conditions for price manipulation, creating land for speculation.
Fourth, regarding the gold business management mechanism, currently only concerned and focused mainly on physical gold (gold bars and gold jewelry). Not yet diversifying gold products (gold certificates, gold accounts/terms). Therefore, this physical demand for gold puts pressure on domestic gold prices.
Faced with the above situation, the Government has issued Resolutions, Official Telegrams, directives and a series of related documents to stabilize the gold market. Notably, from June 3, 2024, implementing the Prime Minister's direction, the State Bank (SBV) has implemented a plan to stabilize the gold market through 4 commercial banks with state and public capital. SJC Company to sell to the market, according to the price prescribed by the State Bank.
With that method - the drastic intervention of the State Bank has been effective, narrowing the difference in domestic and international gold bar prices.
Talking about this solution, experts say this is a good solution but is only an urgent situation in the short term. "There are currently two types of prices in the gold market: The price of gold in the "black market" is about 3-4 million VND/tael higher than the price sold by stabilization units. The current stabilization solution has not been satisfactorily resolved. People's demand for gold in terms of quantity" - Mr. Long said.
Administrative intervention is too great, it is necessary to pay market price for gold
Recently, in Ho Chi Minh City, the State Bank Ho Chi Minh City branch announced that it will collect information about gold bar buyers and sellers and transfer it to the police to detect speculation. This solution was proposed with good intentions but received many mixed opinions from public opinion.
Talking to Labor, Dr. Chau Dinh Linh - Lecturer at Ho Chi Minh City Banking University assessed that in reality, people's past habit of buying gold is only to transact at gold selling points, which are other gold shops. together. Since then, all transactions in the market have not been controlled, and a number of speculative activities have appeared in this market.
More transparent transactions and more controlled cash flow (no cash) will help control profit-taking speculation.
"Through this incident, it can be seen that the management agency's goal is to reduce people's preference for gold. We are adjusting the gold market, like a transition period to a stage where everyone Trading becomes more transparent. Therefore, the regulatory agency is introducing measures to regulate the gold market. However, the regulatory agency is intervening in the market with drastic measures Administrative quality and trickle-down causes public opinion to form negative waves.
I think that the Government and the State Bank of Vietnam have enough potential and intelligence to know what to do next, but we still need to clearly convey the message to the people about the upcoming actions" - Dr. Linh said.
Experts agree that it is necessary to urgently amend Decree 24. This amended Decree must more comprehensively address financial products and services related to gold, not simply managing gold bars and gold. gold jewelry.
In particular, return the production and trading of gold bars to businesses. Commercial banks do not act as a focal point for gold bar trading, but should only deploy derivative products (with sufficient experience and professional qualifications), but if you want to trade gold bars, you should establish Independent gold company.
Mr. Ngo Tri Long said: "Anti-goldization cannot be achieved through administrative solutions but must shift from trading gold bars to trading other gold products (gold certificates, derivatives,...) on a centralized trading center.
Therefore, it is necessary to soon allow the Commodity Exchange to trade gold futures through standard Futures Contracts like advanced countries in the world. Participating members must meet strict standards and be allowed to import and export gold. This will not require the expense of importing physical gold to sell to people."
