They were attending a conference organised by the Business Studies and Assistance Center in HCM City yesterday.

Tran Thanh Hai, chief executive officer of the Viet Nam Gold Business Investors' Companion, said the State Bank of Viet Nam's plan to auction gold was not an optimal middle or long-term measure.

The best measure was to establish the national gold exchange, providing a place for official gold transactions for all institutions and individuals, Hai said.

Unlike the defunct gold trading floors run by different finance institutions in the past, the national gold exchange should be a well-structured playing field for investors with transparent rules that is managed by the central bank, he added.

Hai also said that establishing the national gold exchange will, in the long-term, helped the SBV reduce one-way supply of the yellow metal, as well as reduce the price gap between local and international markets

Once an official gold exchange becomes operational, gold prices here will be close to world prices. Besides, "the exchange will also help reduce demand for US dollars to import gold", he said.

"I think establishing the national gold exchange will help solve the pricing problem gradually and reduce hoarding by residents," he said.

This would, in turn, helped the country mobilise gold from residents and use it for national development, he said.

He also suggested that the Government take measures to ensure supply of gold for jewelry makers as well as strengthen control over the quality of gold jewelry.

Gold market management

The Government Inspectorate of Viet Nam started its first-ever inspection of the management of the local gold market on Monday.

Supervised by Dang Khanh Toan, director of the Department for Internal Affairs and General Economic Inspection, the inspection aims to stabilise the gold market and create greater confidence in it.

The management of the local gold market has been limited in past years, illustrated by significant fluctuations in gold prices and the large gap between the domestic and local markets.

Since 2009, the gold price has doubled, which can be attributed to changes in the world market as well as the impact of domestic policies.

Circular 24 (issued in May 2012) made Sai Gon Jewelry Co (SJC) – which accounted for over 90 per cent of the gold market – the only company authorised to produce gold bars.

The announcement worried those holding non-SJC gold bars and convinced them to trade their gold away, creating a stir in the market.

Since March, when the SBV intervened in the market through gold bar auctions, the price gap between the domestic and global markets became even larger – surging from around VND3 million per tael (US$143) to more than VND6 million ($286).

Expert Nguyen Minh Phong said that the goals of gold bar auctions should be made clear and that the reason for the SJC monopoly and how the auctions contributed to the State budget should be clarified.

The increase in illegal gold imports as the price gap grew larger should also receive attention, he added.

Economic expert Ngo Tri Long said the inspection should clarify whether any of the SBV's policies and decisions were made with individual interests in mind, according to Nguoi Lao Dong (Labourer) newspaper.

He also said the inspection should revealed whether the operation of the Vietnamese gold market complied with market mechanisms. — VNS