Vietnam central bank prepares to auction gold bars as buying fever rages

After a decade-plus hiatus, Vietnam’s central bank will auction SJC-branded gold bars in the coming days as it bids to narrow the gap between domestic and global prices.

National broadcaster Vietnam Television (VTV) has cited the State Bank of Vietnam (SBV) as saying it has finished preparations and will hold the auctions very soon.

Banks and companies that are allowed to trade gold bullion can participate in the auctions. Twenty-six banks and companies have expressed interest in doing so, with 15 having communicated it in writing.

The central bank had held 76 auctions in 2013, injecting 69.9 tons of gold bars into the market, helping reduce the domestic-global price disparity then.

After easing last Saturday, the price of SJC-branded gold bars at Saigon Gems and Gold Company (SJC) hit a fresh high of VND85.5 million ($3,420) per tael of 37.8 grams for bids and asks Monday afternoon.

Bao Tin Minh Chau Co., a major gold retailer, quoted the precious metal at VND82.9-85.3 million per tael. Similar prices were seen at DOJI Corp.

The prices are around VND12 million ($480) per tael higher than global ones, down from VND18 million at some points in time in recent days.

SBV Deputy Governor Pham Thanh Ha had told local media last Friday that the central bank will increase gold supply in an expedited manner following a request by Prime Minister Pham Minh Chinh.

Local retail investors have rushed to buy gold in recent weeks, causing temporary shortages. The yellow metal has been highly popular among Vietnamese people, mostly as a safe haven asset.

Global and domestic gold prices have risen 16.1% and 11.1% so far this year. The precious metal has become a sought-after channel of investment in Vietnam with interest on bank deposits hitting all-time lows.