Hanoi people buy and sell gold. (Photo: DUNG MINH)

According to the summary results of the gold bar auction held on April 23 by the State Bank of Vietnam, there were 2 winning bidders in yesterday's auction. The total winning volume was 34 lots equivalent to 3,400 taels of gold. The highest winning bid was 81,330,000 VND/tael; the lowest winning bid was 81,320,000 VND/tael.

34 gold lots won the bid, gold price went down

Previously, according to the announcement of the State Bank of Vietnam, the total volume put up for auction on April 23 was 16,800 taels; the volume of gold bars in a transaction lot was 100 taels; the type of gold bars sold was SJC gold bars produced by the State Bank of Vietnam; the deposit rate was 10%; the reference price to calculate the deposit value was 80.7 million VND/tael; the reference volume to calculate the deposit value was the expected bidding volume of each member.

The minimum bidding volume that a member is allowed to bid is 14 lots (equivalent to 1,400 taels); the maximum bidding volume is 20 lots (equivalent to 2,000 taels). The bidding price step is 10,000 VND/tael. The bidding volume step is 1 lot (100 taels). Each bidding member is only allowed to register a minimum price equal to or higher than the floor price announced by the State Bank of Vietnam.

The April 23 session saw the participation of 11 units, including seven commercial banks and four enterprises: Saigon Jewelry Company (SJC), Phu Nhuan Jewelry Company (PNJ), Doji Jewelry Group (DOJI), Phu Quy Jewelry Group. The results of the auction showed that only two members won the bid (Asia Commercial Joint Stock Bank (ACB) and SJC Company) with the winning bid volume being only 1/5 of the amount of SJC gold bars that the State Bank of Vietnam put up for auction.

According to the market, after the gold bar auction on the morning of April 23, both domestic and international gold prices fell sharply. SJC gold bar prices were around 79.70-82.82 million VND/tael (buy-sell). At 3:00 p.m. the same day, DOJI listed the price of SJC gold bars at 79.70-82.2 million VND/tael (buy-sell), down 1.3 million VND/tael for buying and down 1.25 million VND/tael for selling compared to the previous session. Saigon Jewelry Company listed the price of SJC gold at 80.5-82.82 million VND/tael (buy-sell), down 500,000 VND/tael for buying and down 700,000 VND/tael for selling. Bao Tin Minh Chau Gold and Silver Company listed the price of SJC gold at 80.55-82.45 million VND/tael (buy-sell), down 600 thousand VND/tael for buying and down 950 thousand VND/tael for selling. At the same time on the international market, the world spot gold price dropped to 2,306 USD/ounce. Converted according to the foreign exchange rate at Vietcombank, the world gold price is equivalent to 68.1 million VND/tael (excluding taxes and related fees).

Need fundamental, long-term solutions

In general, experts assessed that the low number of members and the low volume of gold won in the April 23 session was normal. Because the world gold price is currently fluctuating strongly, businesses will be more cautious when bidding to buy gold. TPBank General Director Nguyen Hung shared that the reason the bank did not participate in the gold auction this time was because of low profit margins.

Mr. Dinh Nho Bang, Vice President of the Vietnam Gold Business Association, commented: “11 units participated but only two businesses won the bid with a total volume of 3,400 taels of gold. In fact, domestic market demand is more psychological. Besides the price factor, participating in the bid must buy at least 1,400 taels of SJC gold, which also makes businesses consider carefully. Because the world gold price has decreased in the past two days, it shows that buying at this time is not favorable.”

11 units participated but only two businesses won the bid with a total volume of 3,400 taels of gold. In fact, domestic market demand is more psychological. Besides the price factor, participating in the bid must buy at least 1,400 taels of SJC gold, which also makes businesses consider carefully. Because the world gold price has decreased in the past two days, it shows that buying at this time is not favorable.

Mr. Dinh Nho Bang, Vice President of Vietnam Gold Business Association

Sharing the same view, economic expert - Dr. Nguyen Tri Hieu analyzed: In the last two sessions, the world gold price has tended to reverse, making not only businesses participating in gold auctions but also people buying and storing gold cautious. "Any business needs stability, a stable market and a stable mentality so that they can offer a suitable price when deciding to buy gold. Therefore, after the session on April 23, the management agency can bid for more sessions in accordance with market developments," Dr. Nguyen Tri Hieu shared.

According to Mr. Nguyen Tri Hieu, the State Bank of Vietnam pushing a volume of gold into the market will cool down the current "fever". However, this is only a temporary solution. The key issue is to soon amend Decree 24/2012/ND-CP on the management of gold trading activities. Accordingly, it is necessary to remove the monopoly of SJC gold bars as well as hand over the import to gold traders, instead of the State Bank doing this. On the other hand, domestic gold prices are also affected by world gold prices, so just bidding for gold is not enough to stabilize this market.

Sharing the same opinion, economic expert - Associate Professor, Dr. Dinh Trong Thinh recommended that Decree 24 should be revised comprehensively and carefully, and its suitability should be considered before deciding how to revise it; it is necessary to strengthen the inspection and supervision of state management agencies over businesses and stores licensed to trade in gold. Notably, Mr. Thinh proposed an important solution which is the issuance of electronic invoices and connection with tax authorities for gold trading activities. From there, the gold market will be more transparent and clear, making gold investment and management easier for the market and the economy.

According to People