Vietnam Central Bank Postpones Gold Bullion Auction Amid Record High Prices

The State Bank of Vietnam postpones a gold bullion auction due to low bidder participation, highlighting challenges in managing the volatile gold market amid soaring prices.

Ayesha Mumtaz
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Vietnam Central Bank Postpones Gold Bullion Auction Amid Record High Prices

Vietnam Central Bank Postpones Gold Bullion Auction Amid Record High Prices

The State Bank of Vietnam (SBV) has postponed an auction of 16,800 taels of SJC-branded gold bullion, originally scheduled for April 18, to April 23 due to insufficient registered bidders and failure to comply with deposit payment regulations.

The auction will now be held at 10am on April 23, with the SBV urging credit institutions and businesses to register for bidding and submit the required 10% deposit by today.

The starting price for the auction is set at VND81.8 million per tael (around $3,213). This comes amid record high gold prices in Vietnam, which reached VND83.5 million ($3,253.4) per tael on Monday, down 0.42% from the weekend. Domestic gold prices have seen a significant gap of around VND10 million per tael compared to global prices this year.

Why this matters: The central bank's gold bullion auction aims to increase the supply of gold bars and address the disparity between domestic and world prices. The postponement highlights the challenges in managing the gold market amid soaring prices and insufficient bidder participation.

The SBV, which has a monopoly on the production and import of gold in the country, last sold gold bullion in 2013 when over 1.8 million taels were offloaded through a total of 76 auctions. Local businesses have urged the central bank to amend regulations in light of the current situation, and Vietnam's parliament has asked the government to investigate gold trading firms for possible market manipulation.

Ahead of the postponed auction, domestic gold prices declined, with SJC gold prices quoted at VND80.3 million per tael for sellers and VND82.8 million for buyers, down 1.3 million per tael from the previous session. So far, 15 commercial banks and gold trading enterprises have qualified to participate in the auction, with a minimum bidding volume of 14 lots (1,400 taels) and a maximum of 20 lots (2,000 taels).

The SBV stated, "The State Bank of Vietnam had planned to auction nearly 17,000 taels of gold bars on Monday as part of efforts to increase gold supplies amid a surge in prices. However, the auction was postponed to April 23 due to a lack of registered bidders." The central bank aims to boost the supply of gold and ease market prices driven up by concerns over geopolitical tensions and the economic crisis.

Key Takeaways

  • SBV postponed a gold bullion auction due to insufficient registered bidders.
  • Auction rescheduled to April 23 with a starting price of VND81.8 million per tael.
  • Domestic gold prices remain significantly higher than global prices.
  • SBV aims to increase gold supply and address price disparity through the auction.
  • 15 banks and trading firms qualified to participate in the postponed auction.