Seizing the Gold Rush: Vietnam's Liberalized Market as a Strategic Hedge Against Currency Depreciation and Inflation

Vietnam's gold market is undergoing a seismic shift, driven by a bold policy overhaul that dismantles decades of state control and ushers in a competitive, market-driven era. For investors, this liberalization represents a rare window of opportunity to position themselves in a sector poised to hedge against the Vietnamese dong's (VND) depreciation and rising inflation. At the heart of this transformation are two key players: Saigon Jewelry Company (SJC), the long-dominant state-backed gold producer, and licensed commercial banks, now empowered to enter the gold production and trading arena.

A Market Unshackled: From Monopoly to Competition

For over a decade, SJC held a near-exclusive monopoly on gold bullion production and branding in Vietnam, operating under the 2012 Decree 24 framework. This model, while intended to stabilize the market, created a distorted landscape. Domestic gold prices soared to a 32% premium over global benchmarks by mid-2025, fueled by currency depreciation, smuggling, and speculative trading. The VND's depreciation against the U.S. dollar—reaching 26,190 VND/USD by August 2025—exacerbated the gap, as gold priced in dollars became prohibitively expensive for local buyers.

The government's recent reforms, however, are rewriting the rules. By allowing licensed commercial banks and enterprises to produce and import gold, the State Bank of Vietnam (SBV) is injecting liquidity and transparency into a market long plagued by inefficiencies. This shift aligns with broader economic goals: curbing inflation (which hit 3.22% year-on-year in H1 2025), stabilizing the VND, and positioning Vietnam as a regional hub for gold jewelry manufacturing and exports.

SJC's Evolving Role: From Monopoly to Benchmark

SJC remains a critical player, but its dominance is no longer absolute. The company's 24K gold bars, long the gold standard for quality and trust, now face competition from new entrants. Yet SJC's reputation and established distribution network give it a psychological edge. For investors, SJC-certified bullion remains a low-risk entry point, particularly as the market adjusts to the influx of new players.

The SBV's revised Decree 24/2012 mandates that all licensed producers meet stringent technical and quality standards, including anti-counterfeit measures and third-party inspections. This ensures that even as the market diversifies, SJC's products will retain their premium status. However, the introduction of competing brands could gradually erode SJC's pricing advantage, making timing a critical factor for investors.

Commercial Banks: The New Gatekeepers of Gold

Licensed commercial banks are now pivotal in facilitating gold transactions, a role that extends beyond mere distribution. Under the new framework, banks must hold a minimum charter capital of VND 50,000 billion (approximately $1.9 billion) to produce gold bullion, a threshold designed to ensure financial stability. This requirement, while high, is expected to attract major players like Vietcombank and BIDV, which already have the infrastructure to manage large-scale operations.

Banks are also instrumental in digitizing gold trading. The SBV's push for electronic transactions and gold certificates aims to reduce cash-based speculation and enhance transparency. For investors, this means greater liquidity and reduced counterparty risk. Moreover, the establishment of a national gold exchange in Ho Chi Minh City—anticipated by mid-2026—will further institutionalize the market, attracting both domestic and foreign capital.

Strategic Investment Opportunities

The liberalization creates a dual opportunity: hedging against currency depreciation and capitalizing on a market in transition. Here's how to position for success:

1. SJC-Certified Bullion as a Core Holding: Allocate 5–10% of your portfolio to SJC 24K gold bars. These remain a trusted store of value, with a 10–15% discount to global prices despite the premium. The SBV's gold auctions and controlled sales through commercial banks will likely stabilize prices over time, but volatility persists in the short term.

2. Hedge with USD-Denominated Assets: Given the VND's fragility, pair gold investments with U.S. dollar deposits or bonds. The interbank rate of 26,134 VND/USD in 2025 provides a reference for hedging strategies. Monitor the VND/USD exchange rate closely, as sharp depreciations could drive gold prices higher.

3. Monitor New Entrants: Track the performance of licensed commercial banks and enterprises entering the gold market. Early movers with strong distribution networks and compliance records could offer competitive pricing and liquidity.

Risks and Considerations

While the outlook is bullish, risks remain. A potential VND rebound—driven by tighter monetary policy or reduced U.S. tariffs—could narrow gold premiums. Additionally, regulatory uncertainty around import quotas and digital banking infrastructure may introduce short-term volatility. Investors should also be wary of liquidity constraints in physical gold markets, particularly for smaller players.

Conclusion: A Golden Window

Vietnam's gold market liberalization is a strategic inflection point. For investors, the combination of currency depreciation, inflation, and regulatory reform creates a compelling case for gold as both a hedge and a growth asset. SJC's enduring credibility and the SBV's structured approach to market expansion provide a foundation for confidence. Yet the true opportunity lies in the transition itself: a market evolving from opacity to transparency, from monopoly to competition.

As the SBV finalizes its revised decree and the national gold exchange takes shape, now is the time to act. The window is open—for those who recognize gold's enduring role in Vietnam's economic landscape.