The State Bank of Vietnam (SBV) has until the end of May to complete its inspection of the gold market, as ordered by the Prime Minister.

Locals buying gold at a jewelry store. Photo: Pham Hung/The Hanoi Times

This directive was outlined in Prime Minister Pham Minh Chinh’s closing remarks at a meeting on May 18, which covered fiscal and monetary policies, the gold market, exchange rates, and interest rates.

In the directive, the Prime Minister reiterated the goal of regulating the gold market to ensure stable, efficient, and transparent operations, and to prevent gold hoarding from affecting macroeconomic stability and national financial and monetary security.

On May 17, the SBV announced an inspection of the gold trading activities by financial institutions and businesses over the past four years. The Prime Minister emphasized that this inspection must be completed within the month. If any legal violations are detected, the case must be promptly referred to the Ministry of Public Security and other relevant agencies for action, he noted.

Additionally, the SBV must tighten controls on compliance with gold trading regulations. It must enforce the ban on market manipulation by enterprises, organizations, and commercial banks involved in gold trading.

The Ministry of Finance, in coordination with the SBV, will enforce the electronic invoicing regulations. This must be completed by June 15, or gold trading businesses will face the most severe penalties, including license revocation.

The inspection comes as gold prices have been rising sharply, with the domestic price diverging widely from global prices despite the regulatory body's efforts to increase supply through auctions. Last weekend, the price of SJC gold bars hit a record high of VND92 million ($3,615) per tael, the highest ever.

Following regulatory directives, the price of SJC gold bars cooled down to around VND90 million ($3,536), but the gap with global prices remained wide, at about VND17 million ($668) per tael.

In this document, the Prime Minister gave the Governor of the SBV the responsibility for implementing immediate management, regulatory, and stabilization measures for the gold market. According to the Government’s Decree No.24 on gold management, the Governor has the authority to decide on specific intervention measures, including the timing, volume, price, and form of intervention. The Governor is fully accountable to the Government and the Prime Minister for the results of these efforts.

Intervention measures must be effective, timely, and appropriately implemented so as not to undermine the effectiveness of the State's regulatory tools, it said. Authorities must also immediately address the sharp discrepancy between domestic and global gold prices.