26,000 taels of gold bullion was successfully sold at the second auction held by the State Bank of Vietnam on April 4.
At the auction, SBV did not set a ceiling price but reduced the starting price from VND43.61 million ($2,000) to VND43.23 million per tael. This starting price is also lower than the market selling price which stayed at VND43.45 million per tael.
Twenty of 22 registered bidders won 25,700 taels. The auction closed with the highest bid of VND43.37 million and a lowest bid of VND43.23.
Vo Thi Ngoc Tuyet, deputy head of Kim Ngoc Phu Company and Pham Anh Dung, deputy head of VietinBank Gold and Jewellery Company agreed that the price this time was reasonable.
As of 2pm, the gold price fell by VND50,000 per tael compared to the morning price and the difference between the domestic and global price reduced from VND4.5 million to VND3.9 million per tael.
Tuyet said if the domestic demand for gold was high then the gap between domestic and world prices would not be able to close quickly. However, the SBV could not sell the gold at too low prices.
Representative from a gold trading company in Hanoi said, “We’d be glad to participate in another auction. We hope that the domestic price will remain more consistent with the world price and to be able to do this, the government needs to provide more gold to the market.”
The first auction on March 28 was deemed unsuccessful because of high starting price.
Director General Nguyen Quang Huy of the Foreign Exchange Department of the SBV said after the first auction that their aim was to balance the supply and demand of gold, since the domestic market was in need of gold bars. “The calculation for the starting price depends on many factors to ensure it comply with the state’s regulations. We are selling state property.” he said.
According to SBV, there will be other gold auctions in April to provide more gold to the market. The next auction may be held on April 5 and three next auctions may be held during the next week.