Brian Jeffrey
On November 11, during a Q&A session, National Assembly Delegate Luu Van Duc from Dak Lak Province brought up a government statement issued on April 14. In it, the Prime Minister directed the State Bank of Vietnam (SBV) and related authorities to take prompt actions to stabilize the gold market.
“Could the Governor clarify how these measures have been implemented and their effects on gold prices and the market outlook?” Deputy Duc asked.
Furthermore, Deputy Pham Van Hoa from Dong Thap noted that the central bank’s recent sale of gold bars to control prices has been well-received by the public. He emphasized that while the bank is selling gold, it isn’t buying any back.
“If individuals need to sell gold for cash, where should they go? The bank isn’t buying, and neither are jewelry stores. Plus, the sale of gold bars is restricted to just Hanoi and Ho Chi Minh City. Why isn’t it accessible across the country for those who want to buy?” Hoa questioned.
In response, Governor Nguyen Thi Hong stated that Vietnam’s gold market trends reflect global patterns. The SBV has enacted several measures to stabilize the market under Decree 24, which began in 2013.
From 2014 to 2019, the Vietnamese gold market experienced relative stability, but public interest in gold decreased. However, starting in 2021, global gold prices rose sharply, resulting in an increase in domestic prices as well. Despite this, the SBV chose to refrain from intervention until June 2024.
When international gold prices peaked at $2,300-2,400 per ounce in June 2024, the government called for immediate measures due to the stark difference between local and global prices.
In response, the SBV launched nine auctions but still faced significant price disparities. “To promptly address the issue, we began direct sales through four state-owned banks and SJC,” explained Governor Hong.
This strategy narrowed the domestic price gap from 15-18 million VND per tael to about 3-4 million VND. Nevertheless, the market remains intricate and precarious, with Vietnam relying solely on imported gold due to a lack of domestic production.
“The SBV will continue monitoring the situation closely to implement measures that stabilize the gold market,” she concluded.
In a follow-up exchange, Deputy Pham Van Hoa reiterated that his worries were shared by his constituents, highlighting the severity of the issue. While the central bank is selling gold bars, it doesn’t buy them back, pushing citizens towards “black market” sales. “Why sell without a repurchase option?” Hoa asked.
He noted that many buy gold bars from the bank to later sell for cash, suggesting that the bank should offer a buyback service to facilitate currency circulation.
“Selling without the option to repurchase, while substantial gold remains with the public, is illogical. The SBV must take this issue seriously,” he argued.
Governor Nguyen Thi Hong responded by explaining the volatile nature of global gold prices, which can change significantly even within a single day.
The SBV needs to evaluate the risks of engaging in gold transactions. “For instance, if we purchase gold from the public at a specific price, and then that price drops, we encounter considerable risks,” she clarified.
Governor Hong wrapped up by emphasizing the SBV’s ongoing advice: “Gold is a highly unstable and unpredictable asset. Those investing should be ready for risks and potential financial losses.”
