Vietnam’s Prime Minister Pham Minh Chinh has directed the central bank to address the significant increase in local gold prices, which he believes has had a detrimental impact on both monetary markets and market sentiment in recent weeks.
The price of gold in Vietnam has experienced a remarkable surge this month, reaching an all-time high of 80 million dong (US$3,292.86) per ounce on Tuesday. Since the beginning of the year, gold prices have increased by nearly 20%, with the precious metal trading at $2,085 as of 0437 GMT on Thursday.
Prime Minister Pham Minh Chinh expressed his concern over the complex movement of the global and domestic gold markets, particularly the rapid increase in domestic gold prices, which has negatively impacted market sentiment. He emphasized the need for the State Bank to implement effective solutions to stabilize the market and address the gap in gold prices between Vietnam and the global market, which has reached nearly 20 million per tael.
It is worth noting that people in Vietnam traditionally hold gold as a hedge against inflation due to its perceived stability. This cultural inclination towards gold ownership may have contributed to the surge in local gold prices but has also put pressure on the domestic market and monetary stability.
Additional insight: The sharp increase in gold prices in Vietnam may also be attributed to factors such as global economic uncertainty, inflation concerns, and the ongoing COVID-19 pandemic. Moreover, the significant gap between local and global gold prices may be indicative of issues within the domestic market and the need for stronger regulatory measures to manage volatility and ensure market stability. The government and central bank will need to work collaboratively to address these challenges and restore confidence in the country’s monetary markets.
