Hanoi (VNS/VNA) - The Vietnam Gold Trading Association (VGTA) has proposedthe establishment of a national gold exchange in Hanoi or Ho Chi Minh City.

The move aims to create a link between domestic gold prices and internationalgold prices, the VGTA said.

This will help eliminate illegal gold trading floors, increase the mobilisationof gold from the people, reduce cash transactions and prevent tax losses to theState.

At a recent VGTA Executive Board meeting, the association made otherrecommendations to renew legal policies as well as management mechanisms forthe gold industry.

It proposed that the Government and the National Assembly remove goldjewellery and fine arts production from the list of conditional business lines,as well as to consider licencing certificates for gold businesses,allowing them to import gold material to ensure they have enough rawmaterials for production.

According to the VGTA, many provisions in Decree 24/2012/NĐ-CP on gold trademanagement are no longer suitable today as Vietnam’s gold market has basicallystabilised.

A number of new laws on investment and business were enacted in the directionof international integration since the decree was created almost adecade ago, the VGTA said.

The association also proposed abolishing the regulation that the State Bankmonopolises the production of gold bars, and does not use SJC gold bar as anexclusive brand name as at present. It reasoned that allowing a number ofbusinesses to produce gold bars would help create fair and equal competition inthe market, creating advantages for customers when buying gold.

Previously, at the end of 2020, the VGTA made the same recommendations.Regarding this issue, Deputy Governor of the State Bank of Vietnam Dao MinhTu said the State Bank's viewpoint is consistent with the policies and theresults achieved in recent years, saying Decree 24/NĐ-CP is stillapplicable.

Tu said, since Decree 24 came into force, it had brought many benefits to boththe micro and macro-economy. In the domestic market, gold prices in recentyears no longer fluctuate greatly and don't affect commodity prices andexchange rates.

When commodity prices and exchange rates do not fluctuate too strongly, it willcreate conditions for stable development of the macro-economy.

"Gold bars and raw gold are not ordinary goods so they need to be managedcarefully,” Tu said.

According to Nguyen Hoang Hai, Vice Chairman of Vietnam Association ofFinancial Investors (VAFI), in 2008 and 2009, there were many gold tradingfloors, whose operation did not bring significant benefits to the economy.

Instead, they disrupted the money market, bringing disadvantages becausemany companies providing gold trading services attracted participants to tradein the form of gambling, leading to massive losses. 

Sharing the same idea, Tu said due to its complex nature and the risks ofgold being freely traded on the exchange, Decree 24 of the Government was bornto effectively manage the trade of gold on the market.

"We will acknowledge and thoroughly study the proposal of the Vietnam GoldTrading Association. But first of all, the macro interests and common interestsof all people must be put first, then the benefits of the gold businesses willbe taken into account,” he said.

The Saigon Gold and Jewelry Company listed each tael of SJC gold at 55.35million -55.72 million VND (buying-selling), a drop of 30,000 VND compared tothe rates on April 27.

Bao Tin Minh Chau Gold Firm in Hanoi also decreased rates per tael to 55.36million and 55.66 million VND (buying-selling) compared to those on April 27.

At the same time, on the global gold exchange Kitco, prices fell 0.1 USD perounce to close at 1.778,01 USD per ounce./.