3 Main Reasons for Gold Price Spike According to Deputy Governor of State Bank

(NLDO)- According to the leader of the State Bank of Vietnam, there are three main factors causing the domestic gold price to skyrocket recently.

Reporting on the gold market management situation at the regular Government meeting on September 6, Deputy Governor of the State Bank of Vietnam Doan Thai Son said that in the past week, the world gold price has skyrocketed, converted to Vietnamese currency, it has increased by more than 3 million VND/tael.

Overview of the regular Government meeting on September 6. Photo: Nhat Bac

At the same time, part of the media activity about the increase in gold prices created widespread expectations that gold prices would break the peak of 3,500 USD/ounce, causing a sharp increase in demand for gold storage.

According to Mr. Doan Thai Son, the recent increase in gold prices was due to three main factors. First, the world gold price increased very high. Second, the market expectation and psychology that the gold price will continue to increase, leading to a very high increase in people's demand for gold.

Third, our supply is in the process of converting the gold management mechanism to the new mechanism, so the State Bank temporarily stopped selling SJC gold to the market. This leads to the gold supply in the market becoming quite scarce. "Those are the three main factors" - Mr. Son emphasized the reasons for the sharp increase in gold prices recently.

State Bank data shows that gold businesses' demand for gold reserves is not high, because gold, unlike other commodities, cannot be reserved due to very high capital costs.

Regarding the gold market situation, following the Government's direction, the State Bank has just completed its inspection of all large gold trading enterprises as well as commercial banks with large gold trading sectors and is in the process of implementing the inspection conclusions.

According to Mr. Doan Thai Son, in the coming time, the State Bank will strengthen inspection and examination to clarify this matter together with relevant ministries and branches to handle violations if any. At the same time, deploy solutions to manage the gold market according to the new mechanism approved by the Government.

Earlier, when opening the meeting, the Prime Minister said that he had directed the relevant agencies to take action to rectify the situation and prevent manipulation of the gold market. The State Bank Inspectorate must also take an active role, and if necessary, the Government Inspectorate must take action to examine the phenomenon of hoarding, price gouging, and market manipulation.

Regarding the stock market, the Prime Minister said that if money flows into the production and business sectors, it is very good, but it is necessary to re-evaluate to see if there are any phenomena of price inflation or manipulation of the stock market.

On the morning of September 6, Saigon Jewelry Company (SJC) listed the price of gold bars at 133.9 million VND for buying and 135.4 million VND for selling, 1 million VND higher per tael than the previous day. Gold prices have continuously increased sharply in the past two weeks, each tael of gold increased by about 10 million VND, equivalent to an increase of nearly 8%.

Similarly, plain gold rings at SJC this morning also increased by 1 million VND per tael, to 127.7 - 130.2 million VND. Phu Nhuan Jewelry Company (PNJ) listed 127.7 - 130.7 million VND. DOJI Jewelry Group bought and sold plain rings at 127.7 - 130.7 million VND.

Source: https://nld.com.vn/pho-thong-doc-nhnn-neu-3-nguyen-nhan-khien-gia-vang-tang-vot-196250906170212026.htm