Despite nine gold auctions, the State Bank of Vietnam (SBV) will cease this measure and introduce alternative administrative tools next week, according to the central bank’s head.
The initiative aims to narrow the gap between domestic and global gold prices and enhance transparency in gold market transactions.
During the socio-economic discussion session on May 29, SBV Governor Nguyen Thi Hong highlighted the recent significant increase in SJC-brand gold prices, mirroring a global trend.
Hong acknowledged the complexity of reducing the price gap between domestic and international gold markets due to persistent and volatile global price fluctuations.
Previously, the SBV increased the domestic gold supply through auctions, similar to efforts in 2013, with the expectation that boosting supply would gradually reduce the price differential.
However, after nine auction sessions, the central bank observed that the anticipated price gap reduction did not materialize. Consequently, the SBV has decided to halt the gold bidding process.
Instead, the SBV will directly sell gold to state-owned commercial banks, including Agribank, Vietcombank, BIDV, and VietinBank, starting today. These banks will then sell gold to the public.
Additionally, the SBV will establish an inter-agency inspection team. This team will conduct a thorough examination of invoices, transaction records, and other aspects of the gold market to identify any unlawful speculative or hoarding behaviors contributing to recent price volatility.
Deputy Prime Minister Le Minh Khai noted that since June 2022, the government and the prime minister have been closely overseeing and guiding the SBV on gold market issues.
The deputy PM stated that 25 policy documents have been compiled to address these issues, encompassing various intervention and stabilization tools, as well as inspection and control measures.
Looking ahead, the government plans to revise regulations for long-term structural changes in the gold market.
Nguyen Duc Hung Linh, founder and chief adviser at Think Future Consultancy and Investment, indicated that the directive to stabilize domestic gold prices would remain, though the methods might evolve.
It remains uncertain whether gold-bar auctions will be completely halted after today or reorganized with different rules, Linh noted.
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