After 11 years, for the first time, the State Bank (SBV) is bidding for gold bars again to increase supply to the market, reducing the price difference in the country and the world.
However, in 3 sessions Gold bidding pieces, starting from April 22, the State Bank had to cancel 2 sessions due to insufficient number of participating units. There was just one successful auction on April 23, but only 2/11 businesses won the bid, with only 3,400 taels out of a total of 16,800 taels of gold bars released by SJC.
The reference price is still high, businesses are not interested
Analyze the reasons why gold auctions do not attract many units to participate and exchange with Reporter. VietNamNet, Associate Professor, PhD. Nguyen Huu Huan, Ho Chi Minh City University of Economics, said that the reference price to calculate the deposit value at the auction on April 23 was at 80.7 million VND/tael, while at that time the market price was only 82-83 million VND/tael.
“So the bidding price is still high, businesses will find it unprofitable to participate in the bidding.
If they buy a large amount of gold, if the world price turns down, they can sell it at a loss, not to mention a profit. Therefore, many units are not interested in bidding sessions,” Mr. Huan acknowledged.
The expert said that the goal of gold bar auctions according to the State Bank is to increase supply, bringing domestic gold prices closer to world gold prices. Increasing supply but selling prices are high, even if we sell hundreds of thousands of taels, we cannot bring the domestic gold price close to the world price.
According to experts, bidding should continue, but the reference price needs to be lower than the market price. Photo: Minh Hien
“The purchase price is over 80 million VND/tael, so there is no way for businesses to bid to sell below the price of 80 million VND/tael. Bidding is therefore only a temporary solution of the State Bank, to prolong time, but has no impact on the gold market at the present time”, Associate Professor, PhD. Nguyen Huu Huan commented.
However, he also acknowledged that the State Bank is also in a difficult position when it has to both stabilize the exchange rate and stabilize the gold market. Meanwhile, the exchange rate has recently “floated” and has put a lot of pressure on it, so importing more gold is now unfeasible.
Mr. Huynh Trung Khanh, Vice President of the Vietnam Gold Business Association, advisor to the World Gold Council in Vietnam, wondered why the State Bank thinks the reference price must be higher than the purchasing price of the business?