Banning bar gold trading on free market uneasy

The government is attempting to ban the bar gold trade on the free market. However, doubts have been raised about the feasibility of the decision.

One of the most noteworthy things in the Resolution No 11 on the six solutions to stabilize the macro economy released by the government on February 24 is that the government is attempting to ban trading bar gold on the free market.

The details of the plan to ban bar gold trade have not been revealed. However, Nguyen Thanh Hai, General Director of VGB, applauded the decision, saying that the ban is being applied in many countries in the world. However, Hai admitted that it will be not easy to implement the plan, because the “culture of hoarding gold” took shape in the 1980s and it has been in Vietnam for many years. Therefore, it will take great efforts to eliminate the habits of the people.

Meanwhile, the manager of another gold trading company in HCM City, who asked to be anonymous, said that he cannot understand what the government aims to do when releasing such a decision.

If the government sets the regulation in order to encourage people to sell gold and ease the pressure on the exchange rate, the objective will not be attainable. In Vietnam, there are not only people who keep gold as an asset, but there are also people who give gold to others as presents, as marriage portions or shares of inheritance.

Does the government aim to eliminate small gold trading shops and put gold trading activities under strict control? If so, the regulation will also not bring the desired effect. Currently, conditions are still not good enough to set up goods trading floors, and there are many problems that still exist in the network, liquidity and transaction culture.

Therefore, Hai said that in order to make the plan feasible, the government needs to issue associated solutions. For example, it needs to point out how to deal with the existing volume of bar gold.

Nguyen Thi Cuc, Deputy General Director of Phu Nhuan Jewelry Company, said that after the decision was announced to the mass media, the business of the company has become better. Cuc said that she supports the decision to ban bar gold trading on the free market.

“Once the regulation is applied, an order in gold trading activities will be set up, which will bring advantages to big gold production and trade companies such as Phu Nhuan,” she said.

Private gold traders think the other way. Nguyen Huu Nhon, the owner of a gold shop near Ben Thanh Market in HCM City, said that the decision has not worried gold shops.

“The ban on trading dollars was released many years ago, but it has never been followed. Dollars still have been traded on the free market. If the State bans bar gold trade, illegal trading activities will be carried out,” he said.

Bui Thi Yen, the owner of Bao Tran Shop near An Dong Market in HCM City, said that people may have to go to big banks or big gold trading companies to buy gold. However, she believes that private gold shops will still have “land to live”, because people will not change their habits of making transactions.

Nguyen Ngoc Que Chi, General Director of SBJ, has warned that if the government bans bar gold trading, private gold shops will still be able to use preliminarily processed gold jewelry for transactions. Besides, Chi said that private gold shops are trading “gold certificates”. When people purchase gold from shops, they do not get gold, but get gold certificates. When they need to sell gold, they just need to show the certificates to get money.

Meanwhile, a representative from a big gold trading company has suggested that the State Bank should establish a national gold exchange in order to put gold trade under control. – Vietnamnet

Tags: Banning bar gold trading in Vietnam