3,400 taels of gold purchased at the first-in-11-year auction

Saigon Jewelry and Gems JSC (SJC) and private equity lender Asia Commercial Bank (ACB) were the two winning bidders at the gold auction held today (April 23) in Hanoi.

Gold trading at Bao Tin Manh Hai store in Hanoi. Photo: Vietnam News Agency

The two companies bought 3,400 of 16,800 gold taels offered for sale by the State Bank of Vietnam.

The highest successfully purchasing price was VND81.33 million (US$3,196.30) per tael, and the lowest was VND81.32 million ($3,195.91) per tael.

These prices were VND620,000-630,000 per tael higher than the floor price of VND80.7 million ($3,171.54) per tael.

SJC and ACB were also the two successful bidders among 11 companies that had signed up for the auction. The nine others included gold and jewelry trading companies Doji, PNJ and Phu Quy, and local lenders VPBank, HDBank, Techcombank, Eximbank,  MSBbank, and Sacombank.

The auction was planned to take place on April 22. However, it was postponed and rearranged due to a lack of sufficient bidders and successful deposits from those who had signed up.

The auction was the first one after 11 years. In 2013, the central bank held 76 auctioning sessions and sold 1.81 million taels of gold.

According to the State Bank of Vietnam, the latest gold auction aims to make additional supplies for the domestic market and cool down the market prices that had been driven up by worries about global uncertainties.

Economic specialist Dinh Trong Thinh said that the central bank will make cautious moves to sell gold and interfere the market.

“There may be many more gold auctions until the domestic prices are close to the global,” he said.

Today afternoon (April 23), domestic gold prices declined. Buyback prices at local gold traders ranged from VND80 million ($3,144) per tael to VND81 million ($3,184) per tael, while selling prices moved between VND81 million ($3,184) per tael and VND83 million (3,262) per tael. The prices were down VND400,000-700,000 ($15.72-27.51) per tael from today’s opening.

Gold prices on the global market moved around $2,306 an ounce, or VND70.8 million ($2,782.5) per tael, thanks to reduced geopolitical risks.

According to economist Nguyen Tri Hieu, gold prices have been down for the last two days, and companies and individual buyers have remained cautious.

“They need a stable market and calm sentiment to make any decisions in purchasing the gold,” he said. “The central bank can arrange multiple auctions depending on the market developments.”

“The recent decline of gold prices is common after a strong uptrend,” Hieu said. “But it is a big question whether the market will become stable amidst global uncertainties, including the Ukraine-Russia military conflicts and the US presidential election.”