The Vietnamese price of SJC gold has sharply decreased from February 25 to March 2, hitting a six-month low
The reduction arose from the State Bank of Vietnam’s (SBV) efforts to limit the disparity between international and domestic gold prices, sparking a sell-off.
Gold prices decreased by VND2 million per tael per day
Early this week’s transaction sessions, SJC gold was traded at more than VND45.10 million million per tael. Prices eased over six consecutive days before climbing to the relative high of VND44.85 million per taelFebruary 28’s VND42.70–43 million per tael represented a VND2 million reduction per tael compared to the previous session.
Experts believe the gold market is responding to the SBV’s gold sales plans. The volume of sold gold has tripled, sometimes even quadrupled, bought volumes.
Economist Vu Dinh Anh said the gold price reductions totally depend on the SBV’s management. SBV previously announced domestic gold prices were not linked to international gold prices. Now, however, it wants domestic gold prices to follow global trends.
The SBV has purchased gold bars through a newly licensed channel in an attempt to cope with the global market’s fluctuations. The stability of gold bar trading has since improved and people’s legitimate rights have been respected.
At the same time, SBV has coordinated with relevant ministries and agencies to develop a draft Prime Minister’s decision on trading gold bars in Vietnam. It has also devised a circular on delivering and protecting gold, regulations on importing and exporting gold, and bidding procedures for trading gold bars. These efforts form the legal basis for the SBV’s gold market intervention.
The effectiveness of the SBV’s intervention can be seen in the domestic gold prices’ fluctuations and the narrowing of the domestic-international price gap from VND5 million to VND3 million per tael.