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Gold tends to resurface in public debate whenever the economy faces major questions about capital. Recently, the issue has been rekindled by the view that when money flows into gold “to rest,” society lacks resources for development. While that interpretation may be correct at the surface level, a deeper look suggests that the core problem may not be that gold restrains capital. Instead, it may reflect gaps in the system that prevent capital from finding productive uses.
In an economy where financial institutions operate efficiently, capital generally does not remain idle. It moves toward higher yields, assuming risk is clearly priced and the environment is stable enough to forecast. When those conditions fail, holding an asset that does not generate cash flow—such as gold—can stop being paradoxical and become a defensive, even rational, response.
In this sense, gold is often treated not as an “optimal” investment but as a “safe” one. It does not pay interest or produce cash flow, yet it also does not rely on the governance capacity of intermediaries. When uncertainty in other investment channels becomes sufficiently costly, accepting lower or no returns in exchange for certainty can follow its own economic logic.
The pattern of hoarding gold in Vietnam is also linked to economic and social memory built over generations. Periods of high inflation, currency volatility, and shocks to the financial system have left lasting impressions on how people hold assets. Behavioral economics suggests that people may weigh the fear of loss more heavily than the opportunity for profit, so decisions tilt toward preservation rather than maximizing returns when risk remains salient.
From this perspective, gold functions not only as an asset but also as a “store of trust.” Holding gold becomes both an economic and psychological reaction to uncertainties that are difficult to measure. As a result, the question “how to mobilize gold” may not be the right starting point.
Bringing gold into the financial system does not necessarily translate into new real capital for the economy. In many cases, gold is simply transferred from personal holdings to the balance sheet of a financial institution—effectively becoming a liability that must be repaid in the future. If that process is not tied to projects with effective returns, the capital created may be only formal rather than productive.
A lesson from the early 2010s illustrates this dynamic. When commercial banks actively mobilized and lent gold, fluctuations in gold prices and changing expectations quickly revealed systemic risk. Regulators ultimately halted the activity entirely. The risks were not attributed to gold itself, but to the way the financial system attempted to “finance” an asset that functions as a hedge. When market expectations reversed, gold-based financial structures became fragile because they depended heavily on trust—the same reason gold was held in the first place.
At a deeper level, the “gold in the people” narrative echoes the development economics concept of “dead capital.” Assets may exist, but if they are not connected to the legal and financial system, they cannot participate in value creation chains. They become islands detached from economic flows.
In that framing, the key question shifts to why this connection does not occur. Often, the answer lies in the level of system trust. When financial commitments are not strong enough and the legal framework does not provide long-term safety, keeping assets outside the system can be a rational choice. What is labeled “dead capital” may therefore be better understood as a gap in trust.
This leads to a different view of the capital problem. An economy may not lack money, but it can still lack capital if cash flows do not move into value-creating areas. Conversely, even if people hold gold, the economy can mobilize resources when the financial system is deep, broad, and trustworthy enough to intermediate savings into investment.
The issue is not only the total amount of assets, but the ability to convert those assets into capital.
From a policy perspective, how gold is framed matters. If gold is treated as a “misallocated resource,” the reflex would be to mobilize it. But if gold is treated as an indicator, the focus should be on improving fundamentals—such as increasing market transparency, strengthening investor protection, and, above all, creating consistency in macro policy. When these factors improve, demand to hold gold may decline naturally without direct intervention.
In that context, the framing itself may need to change. Instead of asking why people hold gold, the question could be what makes them unwilling to stop holding it. The difference is not merely wording: it reflects a different view of where responsibility lies. The first framing places responsibility on individuals, while the second shifts attention to the institutional environment.
That shift may be the starting point for a more sustainable answer to the economy’s capital challenge.
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