Editor’s Note
After an 11-year hiatus, Vietnam’s central bank is set to resume gold auctions this week in a move to stabilize the domestic market. This marks a significant policy shift since its last sale in 2013.
[InsideVina=Hanoi, Jang Yeon-hwan] The State Bank of Vietnam (SBV) will resume supplying physical gold to the market after an 11-year hiatus.
According to the central bank on the 17th, it plans to conduct a gold auction this week, with the specific auction date to be announced one day in advance. This marks the first gold auction by the central bank since March 28, 2013, when 1.8 million taels (1 tael = 37.5g, 10 don) found new owners.
The central bank currently transacts with 26 legal entities, including gold trading companies, of which 15 are qualified to participate in the bidding. Prospective bidders must deposit a guarantee by 5 PM on the day the auction schedule is announced.
On the auction day, bidders can submit their desired quantity and price within 30 minutes after the central bank announces the starting price. The bidding results are expected to be announced within one hour.
Previously, in 2012, Vietnam granted a monopoly on gold bar production to the state-owned precious metals company Saigon Jewelry (SJC) through a decree, as concerns over currency devaluation increased gold demand and its use as currency. However, no new licenses have been issued in the subsequent decade, leading to a shortage of gold bars. Consequently, domestic gold prices have remained nearly 15% higher than international prices.
This year, as the gap between domestic gold trading prices and international prices widened, Prime Minister Pham Minh Chinh instructed the central bank to implement swift measures to resolve the issue.
The Vietnamese government monopolizes gold production and restricts imports.
Amid this situation, on the 15th, the selling price of a 1-tael gold bar in Vietnam reached a record high of 85.5 million dong ($3,381).