Vietnam central bank to sell gold to four state-controlled banks after halting auctions

The State Bank of Vietnam (SBV) has announced that it will be selling gold to four state-owned commercial banks from which citizens can buy the metal in a bid to narrow the domestic-international price gap after abruptly calling an end to auctions.

Agribank, BIDV, Vietcombank, and VietinBank will be allowed to buy gold from the SBV starting next Monday (June 3), Deputy Governor Pham Quang Dung told local press on Wednesday.

The price will be based on global levels, Dung said.

The SBV resumed auctions of SJC-branded gold bars last month after an 11-year hiatus, selling 48,500 taels, or 1.8 tons, to local companies and banks. However, the price premium between domestic and global prices remains high, at around 20%.

“This (price gap) indicates that, besides supply-demand factors, there are likely illegal acts that have manipulated prices and destabilized the gold market,” Dung noted.

“With abundant resources and available tools, the SBV is totally capable of and determined to stabilize the market and achieve the aforementioned goals. The disparity between domestic and world gold prices will be reduced quickly and sustainably,” the official stated.

In addition, the SBV is coordinating efforts with the ministries of Public Security, Finance, Industry and Trade, and the Government Inspectorate to inspect gold trading activities at banks and businesses. Any violations shall be handled strictly, he added.

State-owned Saigon Jewelry and Germ Stone Co. (SJC) was offering SJC-branded gold bars at VND88.8-90.8 million ($3,567) a tael for bids and asks, respectively, at 2:32 p.m. on Wednesday, up VND300,000 on both sides from Tuesday’s close.

Meanwhile, the global spot gold price stood at $2,357 an ounce on Wednesday morning (Hanoi time). At this level, gold in Vietnam is VND17.8 million ($699) a tael more expensive than the world price, with taxes and fees included.