Enhancing Gold Market Regulations: Proactive Measures Taken by the Government

The Vietnamese Government is intensifying its efforts to fortify control over the gold market as part of a broader strategy to secure macroeconomic stability, restrain inflation, and propel growth.

Recently, Prime Minister Pham Minh Chinh presided over a meeting on gold market management and called for the Ministry of Justice and the State Bank of Vietnam (SBV) to expedite revisions to Decree No 24/2012/NĐ-CP on gold trading. The aim is to complete these revisions by June 2025, under a streamlined process aimed at boosting transparency and sustainability in the gold market.

The SBV has already undertaken several interventions, such as implementing gold auctions and distributing bullion through commercial banks and SJC, in an effort to narrow the gap between domestic and global gold prices, thereby stabilizing the market. However, challenges persist, including market manipulation, price speculation, and significant discrepancies between domestic and international prices, as well as gold smuggling.

Central to the government's goals is the efficient management of the gold market, contributing to macroeconomic stability, curbing inflation, and fostering growth. The Prime Minister also emphasized the need for policies that would allow for the recycling of idle gold within the public for socio-economic development without fostering market manipulation or smuggling.

A key long-term proposal encompasses the establishment of a national gold exchange, which experts believe would enhance transparency and sustainability in the gold market. The government has also underlined the importance of a solid legal framework, with electronic transactions carried out through licensed institutions, ensuring vigilant oversight and effective risk control.

Moreover, participants should receive certificates convertible into physical gold under simple conditions, to foster public trust. According to the Vice President of the Vietnam Gold Traders Association, Huyh Trung Khach, revisions to Decree 24 should explicitly include provisions on establishing and operating a national gold exchange.

SBV Governor Nguyen Thi Hong expressed support for the proposal but underscored the need for infrastructure investment and close coordination between the SBV and other ministries to gauge feasibility and potential impacts, as Vietnam is not a gold-producing country.

Parallel to this initiative, the SBV has inaugurated several measures to control the gold market, including releasing bullion into the market through auctions and direct sales, which have significantly mitigated price disparities between domestic SJC gold prices and global benchmarks. Additionally, the SBV is partnering with government ministries to inspect gold trading enterprises, with a view to transferring investigation findings to the appropriate authorities.

To safeguard against manipulation and smuggling, the government will enhance information dissemination efforts and escalate inspections carried out by agencies such as the Ministry of Public Security, the Ministry of Industry and Trade, and the Ministry of Finance. The Government also intends to segregate state management from private gold business operations and to bolster gold jewelry manufacturing, serving to create jobs and stimulate economic activity. Members of the gold trade community, such as Nguyen Tu Mi, Chairman and CEO of Mi Hong Co Ltd, in Ho Chi Minh City, believe the establishment of a national gold exchange is indispensable, as it would promote transparency and offer a credible trading avenue.

People seen inside a gold shop in Hà Nội. - VGP Photo

The Vietnamese Government is focusing on the efficient management of the gold market to bolster macroeconomic stability and combat inflation.
Prime Minister Pham Minh Chinh has directed the Ministry of Justice and the State Bank of Vietnam (SBV) to expedite revisions to Decree No 24/2012/NĐ-CP on gold trading, aiming to complete them by June 2025.
The SBV has implemented measures like gold auctions and bullion distribution to narrow the gap between domestic and global gold prices, but challenges such as market manipulation, price speculation, and smuggling persist.
Central to the government's strategy is the creation of a national gold exchange, which experts believe would boost transparency and sustainability in the gold market.
The government is also emphasizing the need for a strong legal framework, with electronic transactions carried out through licensed institutions, and for fostering public trust through the issuance of convertible certificates for participants.
To prevent manipulation and smuggling, the government will escalate inspections carried out by agencies such as the Ministry of Public Security, the Ministry of Industry and Trade, and the Ministry of Finance.
In addition to these initiatives, the SBV is partnering with government ministries to inspect gold trading enterprises and transfer investigation findings to the appropriate authorities, and aims to support gold jewelry manufacturing to create jobs and stimulate economic activity.