Continuing its session agenda, the National Assembly held group discussions on the morning of May 23, 2024, to assess the socioeconomic situation and the state budget.

Deputy Hoang Van Cuong of the Hanoi delegation paid particular attention to the unusual rise in gold prices and their widening gap with world prices. He said flexible regulatory measures were needed to bring domestic gold prices into line with world prices.

“The State Bank of Vietnam holds gold auctions to increase market supply, but a paradox has emerged: gold prices rise after every auction because the high floor price forces winning bidders to sell at higher prices. Therefore, reverse auctions could be introduced in the coming period, with the bidder that buys gold and then sells it closest to the reference price winning the auction. In addition, Decree 24 must be amended in the long term,” Cuong said.

Deputy Hoang Van Cuong of the Hanoi delegation. Photo: Nhu Y.

Offering his views, deputy Tran Van Lam of the Bac Giang delegation addressed the recent wild fluctuations in gold prices. He said the current gold market’s irrational feature was the gap between domestic and world gold prices, which various measures had failed to narrow.

“The auctions have only heated up the gold market further. This may be because the approach taken recently lacked a clear objective,” Tran Van Lam said.

The deputy, who is a standing member of the Finance and Budget Committee, also expressed concern that the price of gold offered at auction was close to the domestic market price rather than the world gold price. However, if world gold prices rise and domestic prices follow, that is a market development that cannot be controlled.

The deputy, who is a standing member of the Finance and Budget Committee, also expressed concern that the price of gold offered at auction was close to the domestic market price rather than the world gold price. However, if world gold prices rise and domestic prices follow, that is a market development that cannot be controlled.

Deputy Tran Van Lam of the Bac Giang delegation.

According to the deputy, bringing gold prices closer to world market prices requires an accurate and complete calculation of the cost of gold in the domestic market to establish the starting auction price. Specifically, the world gold price should be converted into Vietnamese dong, with import costs and other expenses added to calculate the starting auction price.

“Do we want to sell gold at high prices to bring in more money, or hold auctions to stabilize the market and public sentiment?” Tran Van Lam asked.

Addressing unusual fluctuations in the gold, real estate and corporate bond markets, deputy Ta Thi Yen of the Dien Bien delegation said these developments demonstrated the need for prompt direction, measures to resolve difficulties and stabilize markets, and communication to clarify the situation, in order to avoid negative effects on the economy and disruption to public sentiment.

Regarding the gold market, deputy Ta Thi Yen said it was clear that these developments did not reflect actual public demand but could instead be driven by certain actors “speculating and manipulating the market for profit.”

Sharing this view, deputy Pham Duc An of the Hanoi delegation said Decree 24 “has outlived its historical purpose.” He said gold management required extreme caution: investing in pursuit of international gold price movements could result in losses outweighing gains and could lead to a return to the goldization seen in the past.

Deputy An said the rise in gold prices as the State Bank of Vietnam holds more gold auctions was only an initial-stage phenomenon. In the coming period, the relevant authorities need to refine appropriate gold management methods and policies to avoid “goldization.”

Luan Dung

Link: https://tienphong.vn/vi-sao-cu-sau-dau-thau-gia-vang-lai-tang-post1639649.tpo