The government has instructed the State Bank of Vietnam (SBV) to strengthen oversight of gold management and transaction activities.

Locals buying gold at a jewelry shop in Tran Nhan Tong Street, Hai Ba Trung District, Hanoi. Photo: Pham Hung/The Hanoi Times

In a Government resolution released in April, the Prime Minister assessed that the management of the gold market has been inadequate, leading to significant discrepancies between domestic and international prices. This situation has impacted economic growth, inflation control, and macroeconomic stability.

Therefore, the Government has instructed the SBV to immediately take stricter management and control measures for market transactions. In particular, the central bank needs to address the high price differential between the domestic and international markets, as well as combat smuggling, speculation, and price manipulation.

This directive has been repeatedly issued by the Government and the Prime Minister to the banking sector amidst the sharp rise in precious metals prices, despite the efforts of market regulators to increase supply.

On May 11, the price of SJC gold reached VND92 million ($3,614) per tael, the highest level to date. The gap between the buying and selling exceeded VND2 million ($79).

With domestic gold prices surging, the spread over international prices has also widened to around VND18.5 million ($727) per tael.

Businesses have purchased about 6,800 taels of SJC gold from the SBV after five rounds of bidding. This amount accounts for approximately 8% of the total tenders issued by the regulatory agency.

Contrary to expectations that the precious metals market would cool down as a result of bidding, prices have continued to set new records and trading has remained active. Experts say that in order to narrow the gap with international prices, market regulators need to sell at or below domestic prices. High bid prices only stimulate public hoarding sentiment, making the goal of aligning with international prices more challenging.

Meanwhile, Pham Van Thinh, Member of the National Assembly's economic committee, believes that strict control of trading volumes at retail outlets can prevent price manipulation in the gold market. He suggests that with current technology, it is not too difficult to monitor the volume of gold sold at retail stores.

In the resolution, the Government also requested relevant ministries and localities to closely monitor developments both at home and abroad to promptly adjust policies and resolve issues for businesses and the public. State-managed commodities such as electricity, petroleum, and healthcare services, among others, need careful evaluation of their impacts, appropriate adjustment schedules, and strategies, it said.