Gold market reforms paramount to stability
ing 昀椀rms are to take place on possible market manipulation amid soaring domestic prices, at the same time as the central bank announced it would resume sales of gold bullion for the 昀椀rst time in over a decade.
Last week, the State Bank of Vietnam (SBV) requested the Min istry of Finance (MoF) to enforce strict compliance among gold trad ing organisations, especially those dealing in gold bullion, with the use of electronic invoicing in transac tions. The SBV will mandate severe penalties for businesses that fail to adhere to this regulation.
Additionally, the SBV has asked the MoF to continue pro viding information on incidents of gold smuggling and illegal trans portation across borders so that it can timely access market data and develop effective gold market man agement strategies. The MoF is urged to assist the SBV in the cus toms procedures for the import of gold intended for auction purposes.
A representative from the SBV noted, “We are 昀椀nalising preparations for a gold bullion auction aimed at increasing market supply. This marks the 昀椀rst time in 11 years that the SBV has organised such an auction.”
Currently, about 15 entities are quali昀椀ed to participate in the gold bullion auction, involving SJC gold bars.
Economic expert Dr. Nguyen Tri Hieu shared with his con cerns about the recent volatility in gold markets, saying that the recent surge in gold prices has led to unpredictable market sessions.
“The geopolitical tensions in the Middle East are prompting increased gold purchases by traders, businesses, and central banks, propelling glob al gold prices to sometimes exceed $2,400 per ounce, which impacts domestic prices as well,” Hieu said. “Moreover, a surge in domestic demand for gold is being fuelled by dwindling returns on tradition al investment avenues such as bank deposits, and sluggish performance in real estate and stock markets.”
He also highlighted the specu lative nature of the current market dynamics, noting that the domes tic premium on gold transactions is high, and forthcoming regula tory changes aimed at increasing the supply of SJC gold bars could potentially depress prices.
“Given the current feverish state of the market, investors should diversify their portfolios. Speculative gold trading is also exceedingly risky, especially in such a volatile market. It’s also unwise to 昀椀nance gold invest ments through borrowing, given the high price levels,” he said.
At a recent investors’ day sem inar hosted by Dragon Capital, investment director Le Anh Tuan advised against trying to time the market, suggesting a more system atic investment approach.
“When the market dips by 10 per cent, it presents a buying opportunity, whereas a 10 per cent increase from the year’s end should prompt a reduction in stock hold ings. This approach of buying more
nd during signi昀椀cant market dips and
reducing during rallies can signi昀椀 cantly outperform traditional bank deposits,” Tuan said.
The advice re昀氀ects a broader
strategy that balances the volatisity of stocks with the stability and potential long-term gains from diverse asset classes like gold, Tuan added.n