Gold price drops shockingly after news of commercial banks selling gold?

Closing the trading session on May 29, 2024, domestic SJC gold price turned down sharply compared to the early morning of the same day.

At the end of the trading session, Saigon Jewelry Company Limited - SJC listed the price of SJC gold at 88.3 - 90.3 million VND/tael for buying and selling. Compared to 11:00 a.m. the same day, the price of SJC gold at this unit was adjusted down by 600,000 VND/tael for both buying and selling.

The price difference between SJC gold bars at this unit is currently at 2 million VND/tael. This is still a high difference, pushing the risk to the consumer.

SJC gold price listed at Saigon Jewelry Company Limited - SJC. Screenshot at 8:00 p.m.

Closing the trading session on May 29, 2024, the price of SJC gold at Bao Tin Minh Chau brand is at 88 - 89.8 million VND/tael for buying and selling. Compared to 11:00 a.m. on the same day, the price of SJC gold at this unit was adjusted down by 950,000 VND for buying and down by 700,000 VND for selling.

SJC gold price listed at Bao Tin Minh Chau. Screenshot at 8:00 p.m.

Notably, the price of gold bars plummeted while the price of 24K gold rings and jewelry only decreased slightly to 74.95 million VND/tael for buying and 76.5 million VND/tael for selling. In the international market, the world gold price also dropped to around 2,344 USD/ounce, losing about ten USD/ounce compared to the morning.

According to economic experts, the reason the domestic gold market "evaporated" by millions of VND/tael today was after the news that the State Bank would sell gold to 4 commercial banks including Agribank, BIDV, Vietcombank and VietinBank. Then, these banks would sell to customers in need across the country.

Mr. Pham Quang Dung - Deputy Governor of the State Bank said that the State Bank selling gold to 4 commercial banks will be the next solution to stabilize the domestic gold market, narrowing the gap between domestic and world gold prices.

"From June 3, the State Bank will sell gold to four state-owned commercial banks. The selling price will be determined by the State Bank based on world prices. Banks that buy gold from the State Bank will resell it directly to the people" - Mr. Pham Quang Dung informed and said that the goal is to soon narrow the gap between domestic and world gold prices to a suitable and sustainable level.

Economic experts predict that the gold price on May 30, 2024 will continue to decline, falling far below the 90 million VND/tael mark. Illustrative photo

Previously, to stabilize the domestic gold market, the State Bank also organized 9 gold auctions, of which 6 were successfully organized with more than 1.8 tons of gold added and brought to the market. However, " after 9 auctions, the price difference did not decrease as expected, so the auction was stopped. The State Bank has assessed the situation, found the causes and built a new plan to be implemented next week to reduce the gold price difference" - Governor of the State Bank Nguyen Thi Hong informed during the discussion session at the National Assembly hall on socio-economic development and state budget this afternoon, May 29, 2024.

According to Ms. Hong, gold prices are complicated and move in the same direction as world gold prices. Therefore, "Narrowing the gap in gold prices is a very challenging task. Because we are doing it in a context where international gold prices are constantly fluctuating and complicated, " Ms. Nguyen Thi Hong informed.

The domestic market is still waiting for new measures from the State Bank to stabilize the gold market. However, with the management policies just launched by the State Bank, which is selling to 4 commercial banks, economic experts predict that the gold price on May 30, 2024 will continue to decrease, falling far from the 90 million VND/tael mark.

Source: https://congthuong.vn/du-bao-gia-vang-ngay-3052024-gia-vang-giam-soc-sau-thong-tin-ngan-hang-thuong-mai-ban-vang-323111.html