More than 8,000 gold bars released into the market

The 6th auction organized by the State Bank on the morning of May 14 recorded positive changes in the number of participants as well as the amount of gold supplied to the market.

Previous auctions were often canceled because only one member deposited or a maximum of two members won the bid, but this morning's auction saw 8 businesses winning the bid for 8,100 taels of gold (nearly 50% of the total 16,800 taels offered for bid). It is expected that this amount of gold will reach businesses and banks on May 15.

This is the session with the highest winning bid volume of gold bars (the previous two times each session was only 3,400 taels). Thus, through 3 successful bids, the operator has released 14,900 taels of gold bars to the market.

The winning bid price this morning fluctuated between 87.72 and 87.73 million VND per tael, 1.7 million VND higher than the price SJC bought from people and nearly 1.3 million VND lower than the selling price.

After previous "dull" auctions, this morning's session has relaxed the conditions on minimum and maximum bid size, thereby creating conditions for more members to participate. Specifically, the minimum quantity that businesses can place in a session has been reduced from 700 taels to 500 taels. The maximum purchase level is 4,000 taels, double the previous threshold of 2,000 taels.

Gold prices today remained unchanged until noon after falling by 1-1.5 million VND since opening. Each tael of gold bar is listed by SJC at 86-89 million VND, 2.5 million VND lower than the peak set last week.

The Vietnam Gold Association (VGTA) explained that the scarce supply of gold bars is the biggest reason why this item has a high price difference compared to the world, especially at times when domestic demand increases.

In theory, the bidding and long-term supply increase solution to neutralize market demand will help "cool down" the price of gold bars closer to the world price.

However, the market is having "opposite" reactions in the short term. Some of the first auctions were considered unsuccessful, with high prices and a "small" number of winning bids, making people believe that the price of gold bars will continue to increase.

Instead of understanding the mechanism of long-term increase in supply, prices will decrease, many people think that the State Bank sells at high prices, businesses must also sell at high prices, pushing prices up.

Following the market reaction, the State Bank recently confirmed that it would increase the frequency of bidding to increase appropriate supply to the market. At the same time, this management agency also advised people to be cautious when trading during this period to avoid risks.