The State Bank has supplied the market with more than 13 tons of gold.

ANTD.VN - The State Bank has supplied 1.82 tons of gold to the market through 9 auctions, and 11.46 tons through direct gold sales to 4 State-owned commercial banks and SJC Company.

The State Bank has just sent a report to the National Assembly deputies on a number of issues related to the group of questions at the 8th Session of the 15th National Assembly. Of which, a notable content is related to the management and operation of the gold market.

Gold price increase not ruled out due to market manipulation

Regarding gold prices, the State Bank said that from 2020 to now, world gold prices have fluctuated very complicatedly and unpredictably, with an upward trend being the main trend.

As of the morning of November 5, 2024, the world gold price was at 2,727 USD/oz, an increase of 661 USD/oz, equivalent to an increase of 31.99% compared to the beginning of 2024 and an increase of 833 USD/oz, equivalent to an increase of 43.98% compared to the end of 2020.

The main reason for the sharp increase in international gold prices recently is due to geopolitical tensions, trade, and armed conflicts in many countries around the world escalating, causing the demand for physical gold in some countries and the gold reserves of many central banks to increase sharply.

Domestically, gold prices fluctuated sharply in line with world gold prices. From the beginning of 2024 to June 2024, the gap between domestic and world gold prices widened, especially for SJC gold bars. The gap between SJC gold bar prices and world gold prices at times reached VND 18 million/tael (May 2024).

As of the morning of November 5, 2024, the price of SJC gold bars was traded at 87 - 89 million VND/tael (buy - sell), an increase of 13.5 million VND/tael (about 18%) compared to the beginning of 2024.

Fluctuations in domestic gold prices basically depend on developments in world gold prices and supply-demand relations in the market.

Specifically, on the supply side: From 2014 to 2023, the State Bank did not increase the supply of SJC gold bars to the market. However, from April 2024 to present, facing the strong upward trend of world gold prices, the State Bank intervened in the gold market through bidding and direct sales of gold bars to supplement the supply of SJC gold bars to the market, limiting the impact on the macro economy, currency, and foreign exchange.

On the demand side: The world gold price is continuously increasing, along with the difficulties of other investment channels (frozen real estate, gloomy corporate bond market, low bank deposit interest rates...) making gold more attractive.

However, through monitoring by units in the system, it reflects that the demand for gold buying is mainly concentrated in two major areas, Hanoi and Ho Chi Minh City, and has psychological and expectation factors.

“In addition to the above reasons, it is not possible to rule out the existence of market manipulation, violations of relevant regulations of the law on tax, competition, etc., leading to the high difference between domestic gold prices (especially SJC gold) and world prices,” the State Bank said.

The State Bank has supplied more than 13 tons of gold to the market since April 2024.

The State Bank has supplied the market with more than 13 tons of gold.

To reduce the difference with the world gold price, from April 19, 2024 to May 23, 2024, the State Bank organized 09 auctions with a total winning volume of 48,500 taels (equivalent to about 1.82 tons). However, after 9 auction interventions, the difference between SJC gold price and world price remained high.

To quickly control and reduce the difference between domestic gold prices and world prices, the State Bank switched to selling gold bars in appropriate quantities.

The State Bank selected 04 State-owned commercial banks and SJC Company. As a result, from June 3 to October 29, 2024, the State Bank organized 44 direct sales of SJC gold bars, supplying the market with 305,600 taels of SJC gold (equivalent to about 11.46 tons of gold).

According to the State Bank of Vietnam, before the State Bank announced its policy to directly sell SJC gold bars, SJC gold bars in the domestic market were bought and sold at VND89-92 million/tael, a difference of more than VND18 million/tael (about 25%) compared to the world price.

Since the official announcement of the direct sale of gold bars, the difference between the domestic gold bar selling price and the world price has decreased, currently only about 3-5 million VND/tael different from the world gold price (about 5%-7%).

In the coming time, the State Bank said that this agency will continue to consider intervening in the gold market (if necessary) with appropriate volume and frequency to stabilize the market and monetary policy goals.

Continue to inspect, examine and propose amendments to Decree 24

However, the State Bank of Vietnam admits that there is still a gap between domestic and international gold prices. The market is still not truly stable and sustainable, still affected by psychological factors, expectations, and potential risks affecting the currency and foreign exchange markets; it does not encourage people to sell gold and convert it into VND to invest in production and business.

There are some gold jewelry products with 99.99% content used with properties similar to gold bars (not excluding the raw materials for production from smuggled gold). This phenomenon is easily exploited to reduce the effectiveness of strict management of the gold bar market under Decree 24/2012/ND-CP.

In the coming time, the State Bank said it will continue to consider intervening in the gold market (if necessary) with appropriate volume and frequency to stabilize the market and monetary policy goals.

At the same time, coordinate with relevant ministries and branches to carry out inspection and examination of the activities of gold trading enterprises, stores, agents distributing and trading gold bars and other entities participating in the market.

Conduct a full review of the implementation of Decree 24/2012/ND-CP, propose amendments and supplements in accordance with the practical situation, contributing to preventing the goldification of the economy, not allowing gold price fluctuations to affect exchange rates, inflation and stabilize the macro-economy; enhance the State's role in managing and regulating the gold market in accordance with regulations, ensuring economic security, financial security, national currency and social order and safety.

Source: https://www.anninhthudo.vn/ngan-hang-nha-nuoc-da-cung-ung-ra-thi-truong-hon-13-tan-vang-post594921.antd