Vietnam's gold market went plain crazy on Tuesday, ratcheting up tensions among investors across the country.
For the first time, the gap between buying and selling prices at gold traders widened to as much as VND1 million per tael.
But buyers just kept on buying.
At around 10 a.m., gold hit a record high of VND38 million per tael.
In an effort to stabilize the market, the State Bank of Vietnam announced that it would allow gold imports. The measure seemed to work because, by the end of Tuesday, gold eased to VND36.7 million per tael.
But many analysts viewed the shift as only a short term solution. The last time the central bank allowed gold imports was in October.
Since then, Vietnam's gold prices have continued to surge and the gap between local and international prices has not yet been bridged.
But the recent insanity begs the question: how much gold do we need to import to make a lasting difference?
The central bank needs to step up its efforts to keep gold and currency values reasonably sane.
What's more, the bank needs to put its money where its mouth is.
A week ago, representatives from the bank announced they would inject more dollars into the market to stabilize ballooning dong inflation. Since then, no concrete actions have been taken and the dollar continues to gain strength at home, even as it weakens abroad.
Perhaps worst of all has been the authorities' failure to disseminate consistent market information.
The National Financial Supervisory Commission recently announced that dong deposits fell by VND45 trillion in the first 15 days of October and attributed the drop to a mass run on gold and dollars.
The State Bank of Vietnam promptly denied this claim.
The real problem is that many people still favor gold and dollar investments due to inflationary concerns about the dong.
Economist Le Tham Duong of Ho Chi Minh City Banking University suggested that this problem can only be solved with coordinated efforts by many agencies, not just the central bank.
The Ministry of Industry and Trade, for instance, needs to be more aggressive in controlling prices, cutting budget deficits and pulling the plug on inefficient projects.
"Inflation is not just about money but also about the flow of goods, which means the central bank can't act alone," he said.