Vietnam's Gold Rush: Market Reforms Face Early Test

Vietnam's Gold Rush: Market Reforms Face Early Test

Le Thi Minh Tam, 67, has been searching for gold in Hanoi for weeks, hoping to gift it at her son's upcoming wedding. She waits in long lines outside shops, only to find gold stocks quickly depleted.

“I’m increasingly worried because I haven’t bought enough yet,” Tam sighed. “They’re not selling gold bars anymore, just rings, and there’s a purchase limit per customer, and the quantity is very small.”

She’s not alone. Last month, gold prices soared to a record high of $4,380 per ounce, triggering a buying frenzy in Vietnam. Gold symbolizes good luck in the country, and people often hoard it under their beds as a hedge against economic uncertainty. In October 2025, Vietnam ended a 13-year state monopoly on gold material imports and exports and gold bar production – a system that restricted supply and drove up prices. The government is now trying to open up the market, and this buying rush is an early test of that move.

In Ho Chi Minh City, about 1,700 kilometers (1,056 miles) south of Hanoi, gold shortages are extreme. Some determined consumers have even camped overnight outside popular gold shops to buy a few rings.

“I thought coming at 6 a.m. was early, but when I arrived, there was already a long line,” said Nguyen Kim Hue, 57, an online restaurant owner. “Last time I came, I bought nothing because the gold was sold out.”

Gold is deeply ingrained in Vietnamese culture, playing a significant role in weddings – close relatives gift gold, wishing the newlyweds wealth and prosperity. During the Vietnam War, when the monetary system was shaky, gold was a safe haven for wealth. Even today, people's trust in gold often outweighs their trust in bank deposits.

In 2012, to combat economic instability caused by people hoarding gold to hedge against inflation, the Vietnamese government implemented a state monopoly policy on gold: the State Bank of Vietnam became the sole gold importer, and Saigon Jewelry Co. received the exclusive license to produce gold bars. But this policy widened the gap between domestic and global gold prices, and also spawned a black market that destabilized the local currency. New regulations have revoked these controls, but the changes are expected to be gradual: the central bank still has the power to decide gold import quotas.

“We have to wait until mid-December to know how much gold import quota the central bank will issue,” said Huynh Trung Khanh, vice president of the Vietnam Gold Traders Association. “That amount may be far less than what is needed to meet market demand.”

According to the association's data, Vietnam's annual gold demand is about 55 tons, the highest in Southeast Asia, but the State Bank of Vietnam imported only about 13.5 tons last year. The policy reform aims to narrow the gap between domestic and global gold prices: currently, the Vietnamese gold trading premium is usually between 10%-15%, and the government hopes to reduce it to 2%-3%.

Vietnam Gold Prices Higher Than Global Prices

“We have been through wars and difficult times, so people here have always considered gold the safest place to store wealth – a safe haven, something to rely on when life gets tough,” said Huynh Trung Khanh.

Globally, gold has been one of the best-performing major commodities this year, driven by demand from central banks and investors. From India to China to Turkey, despite soaring gold prices, consumers are still frantically buying gold jewelry and bars, and wedding season has further boosted demand for the precious metal.

In Vietnam, although gold prices have fallen from recent highs, “sold out” signs are still common outside gold shops. Last week, before a popular gold shop in Ho Chi Minh City opened, dozens of people lined up for hours, and employees issued numbered tickets to maintain order. Nguyen Kim Hue brought her husband, and they eventually managed to buy 5 gold rings.

“At first, the shop owner said I could only buy one, but I convinced her to sell me more,” she said with a smile. “I am so happy now.”

New regulations require that any gold transactions over 20 million Vietnamese dong (about $760 USD) must be completed by bank transfer, ending Vietnam’s long tradition of trading gold in cash. This poses a difficulty for some older buyers, who often need to call their children for help with online payments.

Nguyen Kim Hue started buying gold in June, when the price was about 120 million Vietnamese dong per “liang” – a local unit of weight equal to approximately 1.2 troy ounces. Today, the price has risen to about 147 million Vietnamese dong/liang. “I used to keep my savings in the bank, but now I feel safer holding gold,” she said. “This is my way of ensuring that my money doesn’t devalue, and this gold is for my children’s education and my retirement.”

Tran Thi Yen Nhi, 20, works for a construction materials trading company in Ho Chi Minh City. She lined up for 3 hours to buy gold for her sister's wedding. “My parents asked me to help because they have a hard time standing in line for a long time,” said Yen Nhi.

“I’ve developed a habit of buying gold whenever I save some money, accumulating it little by little,” she added. “I saw my grandmother do this when I was a child, she would buy gold every time she saved some money, then hide it under the bed.”

The World Gold Council estimates that Vietnamese people hoard about 500 tons of gold, most of it hidden in boxes under beds. In comparison, Morgan Stanley estimates that Indian households, the world’s second-largest gold consumer, hold 34,600 tons of gold (China is the world’s largest gold consumer, but there is no reliable recent data on private gold holdings).

To curb hoarding and encourage other forms of investment, the Vietnam Association of Financial Investors has proposed that the government levy a 10% tax on gold purchases, covering bars and jewelry. The government is currently considering a 0.1% tax on gold bars to create transaction data tracking, increase fiscal revenue, and curb speculation and black market activity. Vietnam also plans to launch a national gold exchange in three phases, aiming to bring gold stored in homes into circulation, further narrowing the gap between domestic and international gold prices.

But this brings little comfort to Le Thi Minh Tam – who is still struggling to buy gold for her son's wedding. “I am tired and worried,” she said. “The wedding is coming soon, and I haven’t bought enough gold yet. In Vietnam, gold is not just a gift, it’s our way of expressing our love.”