SJC gold bars. Inspections must be increased to keep the gold market in check, alongside efforts to prevent smuggling, speculation and manipulation so that the domestic gold market can operate with stability and transparency. — VNA/VNS Photo Minh Quyết
The State Bank of Việt Nam (SBV) will need to introduce a combination of solutions to stabilise the gold market over the worry that skyrocketing domestic prices might hamper economic development, Deputy Miniter of Public Security Lê Quốc Hùng said at a meeting of the National Assembly Standing Committee on Wednesday.
Hùng said that scrutiny needs to increase in the gold market, along with efforts to prevent smuggling, speculation and manipulation so that the domestic gold market can operate with stability and transparency.
Stressing that the current domestic gold prices are extremely complicated, Hùng said that a combination of solutions must be raised to tighten the monetary security.
One of the important solutions would be to increase gold reserves and tighten the management on SJC gold bar production molds at the National Money Printing House.
The SBV should also bring in mechanisms to intervene in the market, such as managing buying and selling prices, regulating supply and demand, as well as defining specific responsibilities of relevant agencies for gold bar management.
Hùng proposed that the Ministry of Finance make e-invoice issuance compulsory for every gold transaction to enhance the market transparency.
With domestic gold prices skyrocketing in recent weeks, the central bank resumed gold bar auctions in late April, after a pause of 13 years, in a bid to rebalance the market through increasing supply. However, this did not solve the problem with only modest winning bids, so domestic gold prices kept rising to set new records.
SJC gold bars hit a record of VNĐ92.5 million (US$3,614) per tael last week and cooled a little to be at VNĐ90 million at 1pm on Wednesday afternoon. However, the difference between the domestic and world prices remains huge at VNĐ17 million per tael.
The sixth auction held on Tuesday had the highest winning volume of 8,199 taels after the central bank lowered the minimum bidding volume to 500 taels compared to 700 taels in previous auctions.
The central bank said another auction will be held this week.
The SBV also urged people to be cautious when trading gold to avoid risks from the price fluctuations from the world market and the impacts of any tightened market control measures.
Inspection urged
Deputy Prime Minister Lê Minh Khái requested that all relevant ministries and sectors assign officials to join a concerted effort to inspect the gold market and gold trading activities, during a meeting discussing gold market management measures on Tuesday in Hà Nội
Participants suggested that the State Bank take responsibility for stabilising the market, creating a level playing field to ensure the harmony of interests among stakeholders. They also proposed addressing law violations, speculation and manipulation in the gold market.
They stressed urgency in the need to create synchronised solutions both in increasing supply, enhancing inspection, monitoring and handling violations to stabilise the gold market.
The SBV said that it has proposed the establishment of an inter-sectoral inspection team with the participation of representatives from the Ministry of Public Security, the Government Inspectorate, the Ministry of Industry and Trade and the Ministry of Finance.
The inspection will focus on clarifying and strictly handling violations related to gold speculation and price manipulation, SBV Deputy Governor Phạm Quang Dũng said, adding that the work will help propose optimal solutions to effectively manage the gold market in the coming time.
Deputy PM Khái urged relevant ministries, sectors and localities to promptly implement measures to address the current shortcomings of the gold market, toward stabilising the price of gold bars.
He requested that an inspection decision must be announced no later than the end of this week.
The issuance of e-invoice for every transaction must be completed within the second quarter of this year, Khái said.
He also asked the SBV to conduct a comprehensive evaluation of the gold market, especially the market demand and the smuggling situation.
In another move, Minister of Finance Hồ Đức Phớc has asked the General Department of Customs and the General Department of Taxation to increase measures to prevent smuggling cross borders and the illegal trading of gold.
With regard to long-term solutions, the SBV said that it is critical that Decree No 24/2012/NĐ-CP on managing gold business towards removing the monopoly of SCJ-banded gold bars, is amended. Accordingly, gold bullion will be managed following its quality of 9999 purity while jewelery gold is considered a normal product.
A recent report by the World Gold Council showed that Việt Nam registered the strongest bullion demand in the first quarter of this year since 2015, at over 14 tonnnes. — VNS