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May 30, 2024 / 14:20

State-owned banks to sell gold at stabilized prices

The move is aimed at stabilizing the gold market.

Instead of auctioning as before, the State Bank of Vietnam (SBV) will now sell gold bars at a fixed price to Agribank, Vietcombank, BIDV, and VietinBank for distribution to the public.

 State-owned banks would start selling gold to the public in early June. Photo: Khanh Huy/The Hanoi Times

To stabilize the market in line with the Government’s instruction, the Deputy Governor of the State Bank, Pham Quang Dung, announced that starting next week, June 3, the SBV will directly sell gold to four state-owned banks. The selling price will be set by the State Bank based on international prices.

The four state-owned banks—Agribank, Vietcombank, BIDV, and VietinBank—will sell gold directly to the public. According to the central bank, these banks have extensive networks and are ready to meet the necessary conditions to sell gold directly to people.

Although some private banks with gold trading licenses have been buying and selling gold with the public at their counters, the transaction volumes have been minimal. A representative of a state-owned bank added that they will distribute gold through their banking network, not through their gold trading subsidiaries.

This new measure by the SBV comes after a month of gold auctions that failed to effectively narrow the gap between domestic and international gold prices.

Over the past period, the SBV has held nine auctions and supplied the market with  48,500 taels of  SJC gold bars, equivalent to over 1.8 tons of gold. However, the price gap between domestic SJC gold and international gold remains high at around 20%.

Dung noted that aside from market factors like supply and demand, illegal activities, manipulation, and price rigging could not be ruled out as causes for market instability.

With its current resources and tools, the SBV believes it has the "ability and determination" to stabilize the market, said Dung.

“The price gap between domestic and international gold will be narrowed sustainably,” Dung suggested.

Given the complex movements of gold prices both domestically and globally, the Deputy Governor advised the public to exercise caution when trading gold to minimize personal risk.

In parallel with this measure, the SBV is coordinating with the Ministry of Public Security, the Ministry of Finance, the Ministry of Industry and Trade, and the Government Inspectorate to inspect compliance with laws in the gold trading activities of financial institutions and businesses. Violations will be dealt with severely if found.