National gold exchange: What are the benefits?

Prime Minister Pham Minh Chinh has called for a study on the establishment of a national gold exchange. The current management of gold trading and import-export lacks legal transparency and procedural clarity. By setting up a regulated gold exchange, citizens could freely engage in buying and selling with smaller price spreads, reducing individual losses.

At the same time, it would help delineate the scope of state management in policymaking and economic regulation — avoiding the "goldenization" of the economy and commercial gold-related activities. Additionally, it would promote the production of gold jewelry, increase the intrinsic value of gold, and create more employment opportunities.

Once a gold exchange is in place, prices would be public and more closely aligned with global rates. The buy-sell spread would narrow, reducing excessive profits for private gold shops. Buyers and sellers would only need to pay a small platform maintenance fee, which would be significantly lower than current transaction costs.

Moreover, people currently must physically go to gold stores, and face pressure or price manipulation if they buy at one store and sell at another. On the exchange, there would be a single standardized gold type, removing brand-based price differences. Buyers and sellers could choose to receive physical gold or keep it stored securely in the exchange’s vaults, minimizing risks associated with transport and storage.

Conducting transactions through the exchange would also help combat money laundering, as all activities would be transparent and traceable. The government would be able to monitor the market more effectively, collect taxes and fees efficiently, and obtain accurate data to analyze and manage financial flows, stabilize the macroeconomy, and prevent gold hoarding and price manipulation by major players.

Establishing a gold exchange would also enable integration with international markets. Prices would adjust in real-time to global fluctuations, facilitating gold imports and manufacturing, breaking monopolies, and creating a fair and stable marketplace for citizens. This approach would reduce reliance on SJC's gold supply, which, since Decree 24, has consistently fallen short of market expectations.

While Decree 24/2012 served its purpose in maintaining state monopoly over SJC gold to prevent the "goldenization" of the economy, actual commercial transactions in Vietnam are conducted in Vietnamese dong. Therefore, licensing qualified enterprises that meet standards and criteria to produce and supply gold bullion should be pursued.

The extreme gold price gap results in significant losses for individuals who store physical gold. When they need cash and sell, they suffer substantial losses. The government also gains nothing from this discrepancy — unable to control or tax the profit margins, and loses further as USD flows out to fund illegal gold imports. Profits ultimately fall into the hands of smugglers.

Connecting Vietnam’s gold exchange to global markets would facilitate USD-based transactions, generating foreign currency flows that could support macroeconomic stability and help stabilize the USD/VND exchange rate.

Vietnam has previously experimented with gold exchanges. Before regulations tightened, these platforms were highly liquid and convenient, attracting enthusiastic participation from the public. This shows the potential of mobilizing economic resources through a national gold trading exchange.

The Prime Minister’s directive is clear. Solving this "assignment" is now the responsibility of state regulatory agencies. As for the public, there is a strong desire to see a state-managed gold exchange established as soon as possible.