SBV affirms capacity to stabilise gold market

June 07, 2024 - 17:35
The public is advised to remain vigilant to avoid being exploited by ill-intentioned individuals working the gold market.
Domestic gold prices fell sharply after the SBV's measures were carried out. — VNA/VNS Photo

HÀ NỘI — The State Bank of Vietnam (SBV) said that it is working closely with law enforcement authorities to investigate and take strict actions against speculative and manipulative behaviours in the market.

With so many people still lining up to buy gold, the central bank (June 7) has officially announced that it has the necessary resources and resolve to stabilise the gold market and control the gap between domestic and global gold prices at an appropriate level.

The SBV is implementing a comprehensive set of measures with its efforts already produced initial positive results. However, misinformation is currently being circulated, falsely claiming that the SBV lacks the necessary gold supply to achieve any market stabilisation.

It has observed individuals hiring people to bulk buy gold at selling points, aiming to drive up prices and profit from the price differential, causing instability.

The central bank is coordinating with authorities to verify and handle these speculative, manipulative behaviors. Alongside maintaining SJC gold supply for legitimate public needs, the SBV will proactively implement stronger measures against speculation and hoarding.

The SBV is also urgently inspecting credit institutions and gold businesses, especially in Hà Nội and HCM City, to address any violations.

Based on the approved plan, the SBV will directly sell SJC gold bars to four state-owned commercial banks and Saigon Gems and Gold One Member Limited Liability Company (SJC). The direct selling price of SJC gold bars by the SBV on June 7 is VNĐ75.98 million per tael (US$2,989).

Sufficient supply

At a press conference the previous day, the HCM City branch of the SBV said that the central bank's measures were effective, as domestic gold prices has declined significantly in recent days, aligning more closely with international gold prices.

On June 7, SJC gold prices were quoted at VNĐ74.98 million per tael for sellers and VNĐ76.98 million for buyers, nearly VNĐ20 million off the gold peaks in mid May.

The SBV HCM City branch has directed State-owned banks and SJC to continue effectively carrying out gold sales as per the central bank's directives. It has also coordinated with relevant departments to provide guidance and support transparent gold trading for the public.

Recently, the HCM City People's Committee Chairman Phan Văn Mai instructed SJC company to increase its gold bar production capacity to support the Government's market stabilisation efforts.

The SBV branch noted that SJC, as an experienced state-owned enterprise, has the necessary expertise and infrastructure to ensure the effective implementation of the central bank and Government's plan.

The coordinated local-level efforts appear crucial in executing the policies to stabilise the domestic gold market.

Regarding a report of delay in gold trading transactions with customers facing challenges despite high demand, the SBV HCM City branch explained that gold is a unique, high-value commodity closely linked to currency. As such, gold trading requires specific conditions and a rigorous process to be followed.

It noted that regulations mandate public transparency, strict compliance with invoicing/documentation and adherence to anti-money laundering laws. These requirements must be clearly defined and consistently implemented during gold transactions between customers and sellers.

While acknowledging customer concerns over the delays, the branch emphasised that the stringent procedures are necessary to maintain compliance and transparency in the gold market.

It also highlighted the need to balance customer demand with the regulatory framework governing gold transactions in the country.

Authorised gold sellers, including state banks, have digitised their operations. However, higher-than-expected customer volume has led to crowding.

The branch said the situation will improve as sellers, especially state-owned banks, become more professional. Enhancements to customer service processes have already significantly improved the experience compared to initial implementation.

It remains confident that increased professionalism and technology integration will resolve the issue, enhancing gold trading efficiency for customers. — VNS