Gold Auction Resumes in Vietnam Amidst Interest and Caution
On April 23, 2024, the State Bank of Vietnam (SBV) reignited its gold bar auction after an 11-year hiatus, signifying a renewed interest in the precious metal market.
Modest Participation and Cautious Bidding
Despite anticipation, participation in the auction remained low, with only two winning bidders securing a total of 3,400 taels of gold. The auction’s volume fell below expectations, reflecting a cautious approach by businesses amidst volatile global gold prices.
The winning bids ranged from VND 81,330,000 (USD 3,211) to VND 81,320,000 (USD 3,211) per tael.
Experts attribute the subdued response to the auction to the current fluctuations in global gold prices. Businesses are exercising caution, balancing supply and demand.
The “selling as much as buying” principle guides their strategies, emphasizing prudence in stockpiling large volumes of gold during periods of uncertainty.
SBV Auction Parameters
Prior to the auction, the SBV set explicit rules. The total gold volume for auction was 16,800 taels. Individual members could bid for a minimum of 14 lots (1,400 taels) and a maximum of 20 lots (2,000 taels).
Bid increments were set at VND 10,000 (USD 0.40) per tael, while bid volume increments were one lot (100 taels). Bidders were required to offer prices at or above the SBV’s floor price.
Significance and Future Prospects
Although the auction result fell short of projections, it highlights the SBV’s commitment to transparency and liquidity in the gold market.
Despite global economic challenges, Vietnam’s central bank remains dedicated to fostering stability and confidence in the financial sector.
The resumption of gold bar auctions by the SBV serves as a barometer of sentiment and resilience in the face of market volatility.
While subdued participation may indicate some apprehension among market players, it also reflects the cautious optimism within Vietnam’s economic landscape.
