On the morning of April 22, the spot gold price in the Asian market turned down sharply, from 2,392 USD/ounce at the end of last week to 2,365 USD/ounce. With the USD/VND exchange rate at Vietcombank on the morning of April 22 at 25,485 VND/USD, the converted world gold price was over 73.3 million VND/tael.

The domestic price of SJC gold bars decreased by about 1 million VND to 81 million VND/tael (buy) and 83 million VND/tael (sell), then increased again to 83.4 million VND/tael (sell).

The difference in price of SJC gold bars compared to converted world gold price is only about 9.3 million VND/tael.

Thus, although the gold auction has not yet been held, information about the State Bank (SBV) and relevant agencies participating in stabilizing the market has helped the price of SJC gold bars decrease by about 2.5 million compared to the peak.

The decrease is significant due to the recent escalation in world gold prices following the heating up in the Middle East region.

Previously, at the end of 2023 and the beginning of 2024, the price of SJC gold bars was sometimes 18-20 million VND/tael higher than the converted world gold price.

giavangminhhien17 ok.gif
World gold price drops to 2,365 USD/ounce. Photo: Minh Hien

The sharp drop in world gold prices in the Asian market in the first session of the week of April 22 is a positive point that has contributed to reducing the domestic gold fever in the past few weeks. At the same time, it will help the upcoming gold auctions of the State Bank of Vietnam to be more favorable in the direction of reducing the difference with world prices.

The first gold auction on the morning of April 22 was canceled due to insufficient participation.

According to the plan, the State Bank will auction 16,800 taels of SJC gold bars (equivalent to 630kg of gold) with a reference deposit price of VND81.8 million/tael. Each member bids a minimum of 1,400 taels and a maximum of 2,000 taels. This is a relatively high wholesale price compared to the price that gold trading enterprises buy from retail customers at VND81-82 million/tael.

It is also normal that there are not enough members to participate in the first gold auction. In the gold auction that lasted for many months 11 years ago, the first auction on March 28, 2013 also witnessed a situation of unsold gold due to the floor price being too high and unreasonable.

The price of 81.8 VND/tael may also be a step to “test” the market by the State Bank. The price can then be adjusted more reasonably as in 2013.

Selling gold must ensure both an increase in supply to the market and a reduction in the rush to buy or hoarding, while also ensuring no damage to the state budget.

According to the latest information, in the gold bar auction tomorrow morning (April 23), the State Bank of Vietnam has adjusted the reference price down by VND1.1 million/tael, from VND81.8 million to VND80.7 million/tael.

What is the world price forecast?

The domestic gold fever phenomenon in recent months has occurred in the context of a shortage of supply. More importantly, the world gold price has continuously increased sharply and set a historical record high, at times surpassing the threshold of 2,400 USD/ounce, surprising market observers.

Previously, most forecasts said that the world gold price would be around 2,200 USD/ounce in 2024.

In the last session of the week, spot gold prices rose back above the threshold of 2,390 USD/ounce after adjusting due to profit-taking pressure.

But the Asian gold market on the morning of April 22 surprised many people with a drop of more than 20 USD.

The sharp downward adjustment at the beginning of the new week occurred when the USD slightly decreased because China kept its operating interest rate unchanged and did not continue to loosen monetary policy to support the economy as it did in February.

However, many organizations and experts still predict that gold prices will continue to increase. Accordingly, spot gold prices could reach $2,500-2,600/ounce if tensions continue to escalate in the Middle East.

On Kitco, a survey showed that 72% predicted gold prices would increase this week, 21% said gold would stabilize, and 7% predicted a decrease.

The State Bank of Vietnam is rushing to come up with solutions: Will gold prices and USD/VND exchange rates cool down soon? The USD/VND exchange rates and gold prices may cool down soon as the State Bank is rushing to come up with solutions to stabilize the market.