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Tran Quoc Quynh, a senior expert from the Vietnam Gold Traders Association (VGTA) has said the country should establish a national gold exchange.
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| The national gold trading floor is expected to stabilise the domestic market |
He said the exchange is necessary to stabilise the domestic gold market, making gold to be an effective and safe investment channel.
The demand of gold investment has sharply increased in Vietnam over recent years following the constant increases of gold prices in both the local and the world market, which has led to the establishment of a range of gold trading floors in the country run by different financial institutions.
However, most of these floors were operated ineffectively and caused risk for investors, therefore, the government shut them down.
According to Quynh, the Bank for Investment and Development of Vietnam (BIDV) made a recent proposal to the prime minister where the national gold exchange would operate as a state-owned single-member limited liability company specialising in gold. It would be an official gold transaction channel for the entire country, attracting banks and prestigious gold businesses.
There would also be systems and regulations governing transactions and payment, storage, transportation and gold quality. Issues related to risk management and ensuring the gold market’s transparency would be stipulated more clearly and professionally. The national gold exchange could then help mobilise a large amount of gold from people to restrict speculation.
He also highlighted that if approved by the prime minister, the national gold exchange project would need careful and comprehensive considerations. Currently, different financial measures are applied globally. Therefore, Vietnam should select those which are suitable for its socio-economic condition. It is important for concerned agencies to reach a consensus in the selection and the application.
Quynh also revealed that VGTA proposed setting up two national gold transaction floors in 2005 before the boom of gold trading floors but neither came through.
