Vietnam central bank resumes selling gold after 1-month hiatus

The State Bank of Vietnam (SBV), the country's central bank, on Monday announced that it will reactivate the sale of SJC-branded gold bars to meet market demand.

The SBV will sell gold to four state-controlled banks – Vietcombank, VietinBank, BIDV, and Agribank, and Saigon Jewelry Company (SJC) at VND83.5 million ($3,287) a tael.

In September and October, the SBV announced the sales of gold bars only once each month, at VND79.5 million ($3,129.6) and VND88 million a tael, respectively, although gold prices were highly volatile.

The SBV asserted that it will continue the roadmap to “narrow and control” the price gap between domestic SJC gold and global gold at a “reasonable” magnitude.

The SBV’s announcement was made as prices of SJC bars and pure gold rings jumped on Monday, tracking global movements.

SJC quoted its gold bars at VND81-84 million ($3,188.7-3,306.8) a tael for buying and selling, up VND1 million and VND500,000 a tael from the close last week, respectively.

SJC also raised the price of its pure gold rings, of 1 to 5 maces each, by VND1 million ($39.37) and VND500,000 for buying and selling to VND81-84.03 million a tael.

Private jewelry retailer PNJ also raised the price of its pure gold rings by VND500,000 ($19.68) a tael to VND81.4-83 million a tael.

SBV’s injections

Amid wide premiums of domestic and international prices reaching nearly VND20 million ($787.3) a tael, the SBV sold 48,500 taels (or 1.82 tons) of SJC gold bars via nine auctions between April 19 and May 23. However, the wide gap lingered.

The SBV switched its approach to selling gold bars to the four commercial lenders and SJC, who then resold them to end customers. From June 3 to October 29, the SBV injected 305,600 taels, or 11.46 tons, of gold via 44 sales.

At a parliamentary Q&A session last week, SBV Governor Nguyen Thi Hong boasted that the injections helped reduce the price gap to VND3-4 million ($157.5) a tael from VND15-18 million a tael before the bank’s intervention.

She affirmed that her agency will continue to discourage the use of gold as an investment or an asset to speculate on, and will ensure the supply of the precious metal in the market “in a reasonable manner.”