**Gold Price Hits New High**
On May 3, the State Bank of Vietnam held its fourth bidding session for 16,800 taels of SJC gold bars. The bank set a floor price of 82.9 million VND/tael for the bids. However, only one entity submitted a bid, resulting in the cancellation of the auction once again. Out of the four auctions held by the State Bank of Vietnam, three have failed due to an insufficient number of bidders. The only successful auction, held on April 23, sold only 20% of the gold offered to two entities.
SJC gold bar prices hit a new record. Image: Như Ý
Following the third failed auction, the price of SJC gold bars surged to a historic high. At 12:00 PM on May 3, the Saigon Jewelry Company raised the buying and selling prices of gold bars to 83.5 – 85.8 million VND/tael, an increase of 700,000 VND/tael compared to the previous day. This is the highest price ever recorded for SJC gold bars.
Gold bar auctions were implemented by the State Bank of Vietnam to increase supply and reduce the price difference between domestic and international gold bars. However, repeated auction cancellations and a single “failed” auction have challenged the goal of narrowing the domestic-international gold bar price gap in the short term. In the past two weeks, the domestic gold bar price has been trending in the opposite direction of the global gold price.
While the global gold price has been declining over the past 24 hours, the domestic gold bar price has set a new record and widened the gap with the global gold price. SJC gold bars are currently trading at 15 million VND/tael higher than the global gold price.
**Revision of Decree 24 Necessary**
Speaking to the Tiền Phong newspaper, Huỳnh Trung Khánh, Vice President of the Vietnam Gold Trading Association, suggested that the State Bank of Vietnam should consider reducing the minimum required purchase amount from the current 1,400 taels to around 400-500 taels to attract more bidders. Additionally, the deposit amount should be revised as it is considered high by businesses.
According to Khánh, gold auctions are only a short-term solution. In the long run, Decree 24 on gold market management needs to be revised. If the decree is amended, the supply of gold will increase, meeting market demand. This could lead to a decrease in the price of SJC gold by tens of millions of VND/tael. Conversely, if the supply is not increased, the price of SJC gold may continue to set new records.
“The future of gold prices depends heavily on a fundamental solution: increasing supply. The Vietnam Gold Trading Association has proposed that the State Bank of Vietnam allow a few other gold bar brands, such as PNJ and DOJI, to be circulated instead of only SJC, to increase price competition and diversify supply,” said Khánh.
Đinh Thế Hiển, Director of the Institute for Information Technology and Applied Economics, believes that gold auctions are a temporary measure to increase supply in the market. Of course, the winning bid price will be lower than the current market price, but not significantly lower (as the highest bidder wins the auction). Hiển also emphasizes the urgent need to revise Decree 24. Since its enactment over a decade ago, the market has received no additional supply, while demand has increased every year. The increasing demand and lack of supply have led to an increasingly unreasonable price difference.
A representative of the State Bank of Vietnam stated that, in light of the complex developments in the global and domestic gold markets, domestic gold prices have fluctuated sharply, rising rapidly and diverging significantly from international gold prices. Accordingly, to stabilize the market, the State Bank of Vietnam has prepared intervention measures and is conducting inspections of gold trading activities by businesses and credit institutions nationwide…
