Gold sales in dire need of stability

Gold prices on the world market have entered the third consecutive week of increase due to strong buying pressure from central banks and demands from international funds. In Vietnam, increased buying demand has also driven gold prices sharply higher. Particularly in the past 3 days, gold prices have continuously reached new highs.

Gold prices are rocketing with the price of gold rings at many retail stores surpassing the 7.7 million VND a tael mark, gold bars buying at 8.2 million VND a tael, selling at 8.4 million VND a tael. Whereas about a month ago, gold bar prices fluctuated at only about 6.6 million VND a tael for buying and 6.65 million VND a tael for selling.

From the beginning of the year, this is the 3rd time that the prices of rings and SJC gold bars have broken records. However, it is noteworthy that no price increase has been as fast and strong as this time. According to the Vietnam Gold Business Association, the gold price trend in the market shows that buying pressure is stronger, even causing those holding cash to feel anxious as the world gold price shows no signs of adjustment while domestic gold prices are increasing every hour. Meanwhile, the current deposit interest rates are too low.

Another factor pushing gold prices skyrocketed, a month ago, the Prime Minister issued a directive requiring the State Bank of Vietnam to urgently review, develop amendments and supplements to regulations on gold market management for stable and healthy development. However, at the present time, the State Bank has not seen any new actions on the matter. According to experts, the delay in amending Decree 24 related to the monopoly of SJC gold bars as well as the import of gold has made the domestic gold price unpredictable as the world gold price continues to rise.

The removal of the monopoly of the SJC gold brand to connect the domestic gold market with the world gold market is necessary. With multiple supply sources and no protected gold brand, people will have more choices of gold. The gold price will be stable accordingly. Currently, only the SBV is allowed to import gold, so the gold supply in the market is not abundant. When there is buying or selling pressure, the price will fluctuate. SBV has not intervened in the market, so the prices of SJC gold and gold rings continue to rise, the price difference compared to the world price will be very high. Hopefully, SBVwill quickly make fundamental changes for a stable gold market, operating healthily according to market rules.

Reported by Thanh Hong – Translated by Vi Bao