"Gold lying idle in the people's hands is dead gold, while the demand for capital in production and business is very large. What solutions need to be focused on in the coming time to make gold a resource for the economy?", Ms. Tran Thi Hong Thanh, Deputy Head of the Ninh Binh delegation, questioned State Bank Governor Nguyen Thi Hong on November 11.
It is true that gold kept in a safe is a waste because it is not used as capital for production and business. At least it should be converted into deposits in banks, and businesses can borrow that capital to invest in projects.
But it is not easy for people to take out the gold from the safe, because if people want to boldly sell gold for investment, they must have faith in the market. It is not accurate to say that gold kept by people is "dead gold", because sometimes it is kept in the safe and retains its value, but if it is invested but loses value or loses money, that is truly "dead".
Governor Nguyen Thi Hong said the policy is to fight against gold and dollarization, thus discouraging people from holding gold, especially high-value gold bars.
Discouraging people from holding gold is not just a call, but a solution. When people see that putting money into other investment channels is more profitable, they will definitely not hold gold.
For example, depositing money in the bank has a better interest rate than keeping gold, so of course people are not foolish enough to hold gold. But the reality of the market shows that if you sell gold to invest through the bank channel, the interest rate cannot compensate for the increase in gold price in the market. That means selling gold is a loss, but keeping gold is a profit.
Investing in stocks is very uncertain and not many people understand this investment channel. Real estate has been "dead" for several years now. Putting money into a market with no promising output makes people hesitant.
After some recent cases, investing in corporate bonds is no longer an attractive channel because of many risks. Investing in production and business projects is also not easy because the market is facing many difficulties, so holding on to gold is the safest way.
To keep gold from dying among the people and "living" in the market, first of all, stabilize the gold market, do not let the gold price "dance" randomly, up and down chaotically. Create space for people to invest in production and business activities with smart and effective management policies.
The key to opening the safe containing gold in the people is to give people many opportunities to get rich honestly through other investment channels in the market.
