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Central bank governor says auctions fail to curb gold price spikes

The Saigon Times

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HCMC – Gold auctions have failed to prevent domestic prices from soaring, prompting the State Bank of Vietnam (SBV) to explore alternative measures to stabilize the market, said SBV Governor Nguyen Thi Hong.

Speaking at the ongoing National Assembly sitting on May 29 on the nation’s socioeconomic performance, Hong said that the SBV has held nine auctions of gold bars since April 22, injecting 48,500 taels of gold (around 1.8 tons) into the market through six successful sessions. Each tael weighs 37.5 grams or 1.2 troy ounces.

She noted that domestic gold prices move in line with global market movements, the gap between domestic and international gold prices has remained wide. As of May 14, the local price of the metal was around VND15 million higher than the global price.

Given the wide gap, the prime minister has called on the SBV and relevant ministries to find solutions to narrow the gap.

The SBV’s announcement on May 28 to suspend gold bar auctions sparked concerns about tighter supply, leading to a further rise in domestic gold prices.

However, the prices of the metal plunged VND2.9 million this morning after the central bank announced it would sell gold bars directly to four state-run commercial banks, which will then retail the metal to the public.

To further enhance gold market transparency, the SBV has established an interdisciplinary inspection team. This team will comprehensively examine all aspects of the market, including invoices, documents, and preventative measures against illegal activity.

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