Combating the gold hoarding in the market cannot be achieved through administrative solutions.

Secondly, traditional investment channels such as stocks and real estate are becoming uncertain and less attractive, and savings interest rates are continuously falling. At this time, speculative groups seek to drive up the price of gold, and herd mentality is easily swayed by these "waves."

Thirdly, the Vietnamese gold market lacks centralized trading facilities; instead, numerous small-scale gold shops and traders operate. This fragmentation creates a lack of transparency in pricing and facilitates price manipulation, providing fertile ground for speculation.

Fourth, regarding the management mechanism for gold trading, the focus is currently primarily on physical gold (gold bars and gold jewelry). There is a lack of diversification in gold products (gold certificates, gold accounts/term deposits). Therefore, the demand for physical gold puts pressure on domestic gold prices.

In response to this situation, the Government has issued resolutions, official dispatches, directives, and a series of related documents to stabilize the gold market. Notably, from June 3, 2024, following the Prime Minister 's directive, the State Bank of Vietnam (SBV) implemented a plan to stabilize the gold market through four state-owned commercial banks and SJC Company to sell gold to the market at the price set by the SBV.

Through this method – the decisive intervention of the State Bank of Vietnam – the gap between domestic and international gold prices has been narrowed.

Regarding this solution, experts believe it is a good solution but only a short-term emergency. "Currently, there are two types of gold prices in the market: The price of gold in the 'black market' is about 3-4 million VND/ounce higher than the price offered by price stabilization units. The current stabilization solution does not adequately address the people's demand for gold in terms of quantity," Mr. Long said.

Excessive administrative intervention; gold needs to return to its market-based nature.

Recently, in Ho Chi Minh City, the State Bank of Vietnam's Ho Chi Minh City branch announced that it will collect information on gold bullion buyers and sellers and forward it to the police to detect suspected speculation. This solution, while well-intentioned, has received much mixed feedback from the public.

Speaking to Lao Dong newspaper, Dr. Chau Dinh Linh, a lecturer at the Ho Chi Minh City University of Banking, assessed that, in reality, people's long-standing habit of buying gold has been limited to transactions at various gold shops. As a result, transactions in the market lack control, leading to speculative activities.

With more transparent transactions and better control over cash flow (no cash used), it will help to control speculative profit-taking.

"Through this incident, it can be seen that the regulatory agency's goal is to reduce the public's preference for gold. We are adjusting the gold market, like a transitional phase towards a more transparent trading environment. Therefore, the regulatory agency is implementing measures step by step to regulate the gold market. However, the regulatory agency is intervening in the market with administrative, piecemeal measures, leading to negative public sentiment."

"I believe that the Government and the State Bank of Vietnam have sufficient resources and intelligence to know what to do next, but we still need to clearly convey the message to the people about the upcoming actions," said Dr. Linh.

Experts agree that Decree 24 needs to be amended urgently. This revised decree should address more comprehensively all financial products and services related to gold, not just gold bars and gold jewelry.
Specifically, the production and trading of gold bars should be returned to private enterprises. Commercial banks should not act as the main intermediaries in the gold bar trading business, but should only offer derivative products (provided they have sufficient experience and expertise). If they wish to trade gold bars, they should establish independent gold companies.

Mr. Ngo Tri Long stated: "Combating gold hoarding cannot be achieved through administrative solutions; instead, we must shift from trading gold bars to trading other gold products (gold certificates, derivatives, etc.) on a centralized trading center."

Therefore, it is necessary to allow the Commodity Exchange to trade gold futures through standard forward contracts, similar to advanced countries around the world. Participating members must meet strict standards and be permitted to import and export gold. This would eliminate the costly expense of importing physical gold to sell to the public."