Analysis of stabilizing the domestic gold market through establishing a gold trading floor

Abstract

The international gold price increased significantly in the first quarter of 2024, leading to much instability in the domestic gold price. Many national seminars and official state information channels have analyzed the negative consequences and proposed the need to amend Decree 24 on gold business management, advocating for the establishment of a Gold trading floor to contribute to stabilizing the gold market. This article argues that it is crucial to exercise great caution in amending the current Decree 124, as its content remains highly relevant. The government should not be overly concerned with the domestic gold price being higher than the international price but should instead focus on implementing transparent market management solutions to curb smuggling, speculation, and price manipulation. Establishing a Gold trading floor or the government trading gold certificates will not be an effective solution in reducing the public’s demand for physical gold storage or in aligning domestic gold prices with international ones.