Gold auction on April 22nd

Responding to press inquiries on this issue at the State Bank of Vietnam's regular quarterly press conference for the first quarter of 2024 today, April 19th, Mr. Dao Xuan Tuan, Director of the Foreign Exchange Management Department (State Bank of Vietnam), stated that, following the Prime Minister 's directive, the State Bank of Vietnam has made very thorough preparations for the auction of SJC gold bars.

"The State Bank of Vietnam has produced and has gold in its reserves. This afternoon, the State Bank will announce the auction plan to 15 credit institutions and businesses that meet the eligibility criteria. The State Bank will prepare for the auction to begin next Monday," Mr. Tuan informed.

Many experts believe that domestic gold prices will certainly "cool down" immediately after the first auction.

Regarding future policies for the gold market, Mr. Tuan said that the State Bank of Vietnam has reported to the Prime Minister on the summary of Decree 24 on the management of gold trading activities.

The summary of Decree 24, which the State Bank of Vietnam submitted to the Prime Minister, has been reviewed by various ministries and agencies. The State Bank of Vietnam is proposing to the Prime Minister that Decree 24 should be amended.

Gold price fluctuations on April 19th: Gold prices fall ahead of gold bullion auction.

"Assessing the positive aspects of Decree 24 over the past period, we see that its role has been effective. However, it is time to reconsider it to suit the current conditions and circumstances, especially focusing on the State abolishing the monopoly on gold bars and adding more gold brands besides just the SJC brand," said the Director of the Foreign Exchange Management Department.

Should we consider allowing more businesses to import raw gold?

Besides increasing the supply of gold bars, Mr. Tuan also mentioned considering allowing jewelry manufacturers to import raw gold, especially those businesses that the Prime Minister has directed to be involved in production and export.

Specifically, for manufacturing and exporting businesses, the current Decree 24 has created favorable conditions; for businesses with processing and manufacturing contracts with foreign countries, the import of raw gold is being carried out without any obstacles.

Regarding businesses producing gold jewelry and handicrafts in general, the State Bank of Vietnam has currently requested its branches to review this matter, and possibly compile and reassess it for the State Bank's consideration.

Regarding the gold auction, in an interview with Thanh Nien newspaper , gold expert Tran Duy Phuong stated that the Vietnamese gold market is currently quite small, not as large as before. Therefore, in the upcoming gold auction, the State Bank of Vietnam supplying a total of approximately 20,000 taels of gold to the market will be sufficient to "cool down" the market.

"In each auction session, the State Bank of Vietnam will release a maximum of about 5,000 taels of gold. Therefore, in just 4 sessions, the market will gradually stabilize, potentially significantly reducing the price difference between Vietnamese gold and world gold prices."

"A price difference of 1-2 million VND/ounce for gold rings and around 7 million VND/ounce for SJC gold is considered a success," Mr. Phuong said.

Mr. Huynh Trung Khanh, Vice Chairman of the Vietnam Gold Business Association, observed: "Just releasing 5,000 - 10,000 taels of gold into the market each session would be enough to cool down the market. When the State Bank of Vietnam holds an auction, the price of SJC gold bars will drop sharply."

However, when Thanh Nien newspaper raised the question of how much gold supply is needed to stabilize supply and demand, Mr. Khanh said: "It is very difficult to predict how much gold is currently needed each week, because the State Bank of Vietnam usually holds weekly auctions. We will have to wait and see how the price fluctuates in the market after the first auction."

According to Mr. Khanh, in the long term, the State Bank of Vietnam needs to increase the supply to the market by allowing businesses to import raw gold.

Mr. Phuong also expressed the view that the State Bank of Vietnam should grant gold import quotas to gold businesses. Gold businesses would then proactively import gold under the supervision of the State Bank of Vietnam. This import should be seen as increasing the State Bank of Vietnam's gold reserves.

Source link: https://thanhnien.vn/dau-thau-vang-vao-ngay-224-18524041913145891.htm