SBV to resume gold auctions if demand increases

Thursday, May 15, 2014 16:00

To control the local gold market, SBV sells 1.82 million taels, or 69.9 tonnes in 76 auctions in 2013. — Photo

HA NOI (Biz Hub) - A State Bank of Vietnam (SBV) official said that the central bank would resume gold auctions if the demand surges in the local market.

The Saigon Economic Times Online said on May 14 that according to the official, the increase in demand was due to psychological reasons, as the transactions, in fact, were not too exciting as per the gold trading companies' reports.

After selling 1.82 million taels, or 69.9 tonnes, of gold during 76 auctions in 2013, SBV ceased bidding late last year thanks to the stable supply and demand in the market.

Nguyen Hoang Minh, SBV deputy governor in the HCM City branch, said they were watching the gold and forex market developments closely and would suggest possible intervention measures to the central bank.

Minh said the forex market was stable. The local banks are selling the US dollar at rates between VND21,115 and VND21,120. The SBV is continuing to buy foreign currency to increase its forex reserves.

The deputy also advised the people to think twice before buying gold now. The gold price has increased due to psychological factors, pushing the local price much higher than the world price.

On May 15, one tael of the state-owned SJC gold was sold at VND36.55 million, or $1,740, at the Saigon Jewellery Company, while on the global gold trading floor, it was $1,302 per ounce or $1,569 per tael. Thus, each tael of gold in Viet Nam was $171 higher than in the world market.

If the bank interferes with the gold supply, the price will be cut.

In HCM City, SBV kept a close watch on the banks' liquidity for possible intervention, said Minh, confirming that the operation of the banking system remained stable. — VNS

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