Vietnam's Central Bank to Auction 17,000 Taels of Gold to Stabilize Market

The State Bank of Vietnam (SBV) announced it will auction nearly 17,000 taels of gold next week to 15 approved businesses, with a minimum price of VND81.8 million ($3,214.77) per tael. The auction, set for April 22, aims to stabilize the domestic gold market and assess demand amid soaring prices and a widening gap between local and international rates.

The central bank has prepared the gold and will announce the bidding policy to the eligible businesses this afternoon. Each of the 15 qualified organizations, including commercial banks and gold companies, can purchase a maximum of 2,000 taels. The winning bids will be announced one hour after the auction closes, and prospective buyers need to place a 10% deposit to join the bidding process.

Why this matters: The auction marks the SBV's first sale of gold bars in over a decade and is part of broader efforts to stabilize Vietnam's gold market. Local gold prices have reached record highs this year, trading as much as VND15 million ($590) per tael above international rates, prompting Prime Minister Pham Minh Chinh to urge the central bank to intervene.

The SBV is coordinating with various government agencies to crack down on gold smuggling, market manipulation, and price speculation. It has also sent documents to ministries and agencies, asking for their coordination in implementing the Prime Minister's instructions on gold market management. The central bank's branches are working with competent agencies to intensify inspection and supervision over gold businesses and handle any violations of regulations.

Experts believe the domestic gold price will "cool down immediately after the first auction," according to the provided summaries. The SBV is also considering amending Decree 24 on gold business activities, such as abolishing the monopoly on SJC gold bars, allowing more gold brands, and permitting gold jewelry manufacturers to import raw gold. The total gold supply to be auctioned is expected to be enough to stabilize the market and reduce the difference between Vietnam's and world gold prices.

Key Takeaways

• SBV to auction 17,000 taels of gold to 15 businesses on April 22.
• Auction aims to stabilize domestic gold market and assess demand.
• SBV coordinating with agencies to crack down on gold smuggling and manipulation.
• Experts expect domestic gold price to "cool down" after the first auction.
• SBV considering amending Decree 24 to allow more gold brands and imports.