Gov’t doubles effort to control gold market

These ministries and agencies are the State Bank of Viet Nam (SBV) and Ministries of Public Security, Industry and Trade, Justice, Science and Technology, Information and Communications and the Government Inspectorate.

The move was made in the wake of sharp fluctuations of domestic gold prices which have disrupted market stability, financial and monetary market safety as well as social psychology.

Specifically, the SBV was tasked to keep a close watch on both international and domestic gold price markets to respond to fluctuations and minimize discrepancies between domestic and international gold bar prices and prevent the "goldization" of the economy and avoid negative impacts on exchange rates, interest rates, monetary markets, foreign exchange and overall financial security. 

The SBV is also in charge of reviewing the enforcement of Decree 24/2012/ND-CP, dated April 3, 2012 on managing gold business activities and putting forward amendments before March 22, 2024.

The SBV, in collaboration with relevant authorities and law enforcement agencies, is responsible for inspecting gold trading enterprises, gold shops, bullion traders, distribution and trading agents, and other market participants in order to combat smuggling, profiteering, speculation, manipulation, and other practices that disrupt market stability.

The Ministries of Public Security, Industry and Trade, Finance, Justice, Information and Communications, as well as other relevant agencies and local authorities, are instructed to actively coordinate with the State Bank of Viet Nam in managing the gold market.

Under Decree 24/2012/ND-CP, the SBV has a monopoly on gold production and import, while Saigon Jewelry Company (SJC) was the sole maker of SJC-branded bullion.

The monopolies cause imbalance in supply and demand in the gold market, causing domestic gold prices to differ widely from world prices. At some points, the price gap was up to VND20 million a tael, which was unreasonable.

With huge gaps in domestic and world gold prices, smuggling for profit increases, which makes it difficult to manage the gold market, causes loss to the State budget and poses risks to foreign exchange rates. Speculation and manipulation are also distorting the domestic gold market.

Experts suggested it is time to amend the decree and hope that the gold market will experience greater liberalization in the future.

In a regular government meeting in February, Prime Minister Pham Minh Chinh tasked the central bank to promptly propose amendments to Decree 24/2012/ND-CP on gold business management. The Prime Minister's Directive No 06/CT-TTg on February 15, 2024, urged the State Bank to expedite the review of the Decree and propose effective solutions for gold market management in the first quarter of 2024./.