Vietnam aims to initiate national gold exchange by early February

Vietnam is on track to launch a national gold exchange before February 10 in an effort to stabilize the local gold market amidst prolonged volatility in prices. Minister-Chairman of the Government Office Tran Van Son emphasized the importance of establishing this centralized gold exchange during a regular government press briefing in Hanoi.

The national gold exchange is expected to enhance market transparency and stability while allowing authorities to closely monitor market developments and intervene when necessary. The government is working diligently to bring the gold exchange online before February 10, with a primary focus on ensuring the safe and orderly operation of the domestic gold market.

The decision to expedite the launch of the gold exchange follows a directive issued by Prime Minister Pham Minh Chinh on January 24, urging the State Bank of Vietnam to swiftly complete studies and proposals for the establishment of the exchange. Financial experts believe that a centralized gold exchange could significantly improve transaction transparency, mitigate speculation and market manipulation, and gradually mobilize idle gold reserves held by the public into the economy.

However, the effectiveness of the exchange will depend not only on its launch but also on the clear definition of the scope of gold transactions subject to regulation. Can Van Luc, the chief economist at the Bank for Investment and Development of Vietnam, highlighted the importance of stricter management of investment and reserve gold such as bullion and bars, which are crucial for financial stability.

Luc suggested that jewelry gold, primarily used for consumption, should be governed by a more flexible mechanism. To mitigate systemic risks, Luc emphasized the gradual disclosure of data on gold holdings in the economy and an end to gold-based borrowing and lending practices, which could pose risks to the financial system.

He also stressed the need to narrow the gap between domestic and global gold prices by increasing the legal supply through standardized gold bar specifications, reducing processing costs, and creating more favorable conditions for enterprises to import and produce gold.

The establishment of a national gold exchange represents a significant step towards enhancing market stability, transparency, and efficiency in Vietnam’s gold market. As the government works towards launching the exchange, experts are optimistic about the positive impact it could have on regulating gold transactions, curbing speculation, and channeling idle gold reserves into the economy.