The State Bank of Vietnam (SBV) plans to hold a gold bar auction this week (April 15-19) to increase gold supply to the market.

Thus, after 11 years, for the first time, the State Bank of Vietnam plans to reopen the SJC gold bar bidding channel, with the expectation of ensuring supply-demand balance, reducing the price difference between Vietnam and the world .

Speaking with VietNamNet reporter , Mr. Huynh Trung Khanh, Vice President of Vietnam Gold Business Association, advisor of World Gold Council in Vietnam, assessed that gold auction is one of the solutions to create the fastest supply for SJC gold bars.

According to Mr. Khanh, to reduce the current gold price "fever", gold bar auctions are a necessary measure. This is not the first time gold bar auctions have taken place. The State Bank of Vietnam used this solution in 2013, with dozens of auctions.

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According to experts, gold bar bidding is a necessary solution to create the fastest supply of SJC gold bars. Photo: Minh Hien

Mr. Khanh believes that the auction of gold bars will certainly reduce the gap between domestic and world gold prices. However, the extent of the reduction depends on the amount of gold that the State Bank will supply to the market.

“For example, the market needs 10,000 taels in a week, and the State Bank must supply that amount to reduce the price difference. But if it can only supply 2,000-3,000 taels, the price will decrease somewhat but will still be high.

Through a few auctions, we will somewhat understand the market demand, from which the State will consider how much SJC gold to supply," said Huynh Trung Khanh, advisor of the World Gold Council in Vietnam.

Dr. Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, assessed that the State Bank's auction of gold bars only solves the supply-demand problem in the short term.

Mr. Nghia suggested that the correct way to do things that has both short-term and long-term value, is consistent with international practices, and is easy to control, is to allow qualified companies to import and export gold and control it with taxes.

According to Dr. Dinh Tuan Minh, Director of the Center for Research on Market Solutions for Socio -Economic Issues, the State Bank of Vietnam auctions gold to increase supply, so the possibility of narrowing the price gap is expected.

However, sharing with VietNamNet, Mr. Minh is concerned that when people have a sudden increase in demand for gold bars, will the State have enough resources to import gold, because import is also related to foreign exchange?

Therefore, Mr. Minh proposed that a longer-term solution is to build a modern gold market to serve people's trading and buying and selling needs.

“There needs to be a trading floor so that people can easily buy and sell. There, people will participate in buying and selling gold credits issued by the State. Buying and selling is like holding paper money, the value is equivalent to a certain amount of gold. This will reduce dependence on physical gold, reducing the need for the State to import gold. Thereby, it is possible to put people's gold reserves into the economy, for circulation,” said Mr. Minh.

According to Mr. Huynh Trung Khanh, Decree 24 stipulates that only the State Bank is allowed to import raw gold. However, this decree also allows the State Bank to authorize any entity capable of importing raw gold to make jewelry gold and 9999 gold.

Therefore, in addition to bidding for gold bars to increase supply, when amending Decree 24, it is necessary to remove the monopoly on SJC gold and the monopoly on importing and exporting raw gold to make the market easier.

SBV auctions gold: SJC gold price may fall to around 70 million VND? The State Bank plans to auction gold in the week of April 15-19 to increase supply to the market and lower gold prices. Gold bar prices are forecast to fall, but will they fall to 73 million VND/tael, equivalent to the world price?