Keeping difference in gold prices in check

In fact, in recent times, domestic gold prices have been constantly in a race with world gold prices. In October, a tael of SJC gold bars has increased by 5 million VND.

In a report to the Prime Minister in March, Vietnam’s central bank proposed four sets of solutions and two sets of recommendations to help carry out its function of regulating the gold market.

Under the direction of the government and the prime minister, SBV has coordinated with ministries, agencies and localities to implement comprehensive solutions to deal with the high gold price difference, contributing to stabilising the market and the macro-economy.

The central bank also directed its local branches to work with competent agencies to grasp the situation as well as inspect and supervise gold trading activities in their localities.

SBV required credit institutions and enterprises licensed to buy and sell gold bars to strictly comply with regulations on gold trading activities, while requesting that the Ministry of Public Security, Ministry of Industry and Trade and Ministry of Finance strengthen inspection and supervision in accordance with their powers, and strictly handle violations such as gold smuggling, manipulation and profiteering, which cause market instability.

In 2024, the central bank also coordinated with relevant ministries and agencies to organise inspections on compliance with legal policies in gold trading activities. The inspections have now been completed and an inspection report is being compiled.

In addition, the SBV organised direct gold bar auctions to increase the supply of SJC-branded gold bars to the market, coordinated with ministries and agencies, especially the Ministry of Public Security, as well as local authorities to ensure the effectiveness of intervention plans.

With the above synchronous solutions, the difference between domestic and international gold prices has been gradually controlled and maintained within a suitable range. Domestic gold prices are currently about 5-7% higher than world gold prices.

The stabilisation of the gold market has helped support the foreign exchange market, exchange rates and the management of macroeconomic policies. However, the gold market is expected to remain complicated in the coming time.

Some economic experts predict that the world gold price could reach 2,800 USD per ounce if the geopolitical situation remains as tense as it is now. It can even reach 3,000 USD per ounce in 2025.

SBV is finalising a report proposing amendments to a 2012 decree on gold trading so as to complete the legal framework for the management of gold trading activities, ensuring it adheres to the Party’s policies and the prime minister’s instructions and comes in accordance with the practical situation and international practices in the management of the gold market.

Many economic experts highly appreciate SBV’s efforts to narrow the gap between domestic and international gold prices, but stronger and more effective solutions are needed to increase the gold supply because people’s demand for gold is legitimate but currently faces many difficulties.

The fact that people find it difficult to buy SJC gold bars when ordering online shows that the prices of gold bars do not reflect the true supply and demand of the market.