Vietnam gold prices slide ahead of 8th central bank auction

Prices of gold bullion in Vietnam slipped on Tuesday morning ahead of the eight auction to be held by the central bank.

At the open, state-owned Saigon Jewelry and Germ Stone Co. (SJC) reduced its quote by VND200,000 ($7.86) for both buy and sell from Monday’s close to VND88.8-90.8 million ($3,566.8) a tael, respectively. At 9:09 a.m., the company lowered the price by another VND300,000 to VND88.5-90.5 million.

Meanwhile, privately-run Doji priced the yellow metal at VND88.8-90.3 million ($3,547.2) a tael.

At 8:11 a.m. (Vietnam time), the global spot gold price stood at $2,426.1 an ounce, up $8.1 an ounce from last night. With fees and taxes included, the global gold price is VND14 million ($550) a tael cheaper than in Vietnam.

The State Bank of Vietnam was scheduled to auction 16,800 taels this morning at a starting price of VND88.6 million ($3,480.4) a tael.

The central bank sold a combined 27,200 taels, equivalent to 1.02 tons, of SJC-brand gold bars in the previous seven auctions, just 23% of the quantity put up for auction. Three of the seven auctions attracted no bids.

The SBV last week announced that it will launch inspections of the gold market this week, focusing on compliance of regulations on gold trading, anti-money laundering, accounting and invoicing, and tax obligations between January 1, 2020 and May 15, 2024.

The inspections teams are made up of representatives from the SBV, Ministry of Public Security, Government Inspectorate, Ministry of Finance, and Ministry of Industry and Trade.

Amid calls by local economists for free imports of gold to increase supply, researchers with the Hanoi-based Vietnam Institute for Economics and Policy Research (VEPR) and Think Future Consultancy last week warned against massive imports as they would not radically narrow the gap between domestic and international gold prices.

They suggested taking administrative measures such as inspections, probes into price manipulation, and the increased use of electronic invoices, which they believe will lead to the immediate stabilization of the local gold market.