May 11, 2024 | 11:04 GMT+7

Vietnam's Gold Rush Under Scrutiny Amid Soaring Prices

Donald Tran -

Hanoi Cracks Down on Gold Market Manipulation

Authorities suspect that these illicit activities are driving up domestic gold prices. (Photo source: internet.)
Authorities suspect that these illicit activities are driving up domestic gold prices. (Photo source: internet.)

The Vietnamese government, alarmed by the soaring prices of the precious metal and the widening gap between domestic and international benchmarks, has launched a sweeping crackdown on potential manipulation and illicit activities within the gold industry.

Investigation Targets All Key Players

Deputy Prime Minister Le Minh Khai, expressing deep concern over the situation, on May 10 issued a directive mandating an immediate and thorough investigation into the operations of all key players in the gold market.

The State Bank of Vietnam (SBV), the nation's central bank, has been entrusted with the task of scrutinizing gold production and trading enterprises, retail stores, and distribution agents.

No stone will be left unturned as the SBV delves into potential violations of Decree No. 24/2012/ND-CP, which governs gold trading activities, as well as other relevant laws and regulations.

The investigation, which is expected to be completed by the end of May 2024, will be particularly focused on uncovering and prosecuting cases of smuggling, profiteering, price manipulation, and unfair competition.

Authorities suspect that these illicit activities are driving up domestic gold prices, creating an artificial bubble that could burst with devastating consequences for the economy.

Comprehensive Measures to Tighten Control

Beyond the investigation, the government has unveiled a comprehensive set of measures aimed at tightening control over the gold market and restoring order.

In a major move towards transparency and accountability, all gold transactions will be required to be conducted using electronic invoices by the end of the second quarter of 2024.

This technological leap is expected to make it easier for authorities to monitor the market, track suspicious transactions, and identify potential violations.

The SBV, in close collaboration with other relevant agencies, will also intensify its oversight of gold trading activities. This will involve not only stricter enforcement of existing regulations but also the introduction of new measures designed to deter illegal practices and protect consumers.

The government is committed to ensuring that the gold market operates in a fair, transparent, and lawful manner, free from the taint of manipulation and speculation.

The State Bank of Vietnam. (Photo source: internet.)
The State Bank of Vietnam. (Photo source: internet.)

Regulatory Framework Under Review

In a bid to address potential loopholes and weaknesses in the existing regulatory framework, the government will undertake a comprehensive review of Decree No. 24/2012/ND-CP.

This review will inform the development of new policies and regulations that are better equipped to handle the complexities of the modern gold market.

The goal is to create a robust and adaptable regulatory regime that can effectively safeguard the interests of all stakeholders.

Economic Stability and Consumer Protection at Stake

The government's intervention in the gold market is driven by a growing unease over the potential negative impacts of soaring gold prices.

There are fears that the widening gap between domestic and international gold prices could destabilize the Vietnamese economy, making it more vulnerable to external shocks and undermining investor confidence.

Additionally, the proliferation of illicit gold trading activities could threaten the country's financial security by facilitating money laundering and other illegal financial flows.

Furthermore, high gold prices could erode the purchasing power of consumers, particularly those who rely on gold as a store of value and a hedge against inflation.

The government is determined to protect consumers from the adverse effects of market manipulation and ensure that they are not unfairly burdened by artificially inflated prices.

The ongoing crackdown on the gold market is expected to have far-reaching consequences for the industry. Smaller, less compliant players who have been operating in the shadows may find it difficult to survive in the new regulatory environment.

The government's actions are likely to lead to a consolidation of the market, with larger, more established players gaining a greater share.

However, the long-term success of these measures will hinge on the government's ability to effectively enforce the new regulations and maintain a consistent policy stance.

The fight against market manipulation is a continuous battle that requires vigilance, adaptability, and a willingness to take bold action.

The government's determination to tackle this issue head-on sends a clear signal to the market that it is committed to upholding the rule of law and protecting the interests of all stakeholders.

The investigation and subsequent regulatory actions are part of a broader effort by the government to stabilize the economy, mitigate the risks associated with volatile commodity prices, and ensure the long-term sustainability of Vietnam's economic growth.

As the nation navigates the challenges of the modern global economy, the government's unwavering commitment to maintaining a stable and fair marketplace is a beacon of hope for a prosperous future.

The original article is written and published on VnEconomy in Vietnamese only. To read the full article, please use the Google Translate tool below to translate the content into your preferred language.
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