|SBV will continue these sales in 2014 in an attempt to further stabilise the domestic market and address imbalances between supply and demand.— Photo infonet
HA NOI (VNS)— The State Bank of Viet Nam (SBV) sold 1.82 million taels (69.9 tonnes) of gold during 76 auctions in 2013.
SBV will continue these sales in 2014 in an attempt to further stabilise the domestic market and address imbalances between supply and demand.
The gold was largely sold to credit institutions to help close outstanding gold deposits. Other sales were sold to gold firms to meet market demands.
The sales reduced local gold prices to VND34.6-34.7 million (US$1,641-1,646) per tael at the end of 2013, down VND12 million ($569.28) per tael, or 24 per cent against the year-end in 2012.
The gold auctions have been used by SBV to battle speculative activity in the market, minimise gold imports and increase foreign reserves. Gold auctions are among the tools used by the central bank to regulate the gold market.
In the first trading day of the new year on Thursday, local gold prices were up VND160,000 per tael ($7.5), or 0.38 per cent, to VND34.82-34.9 million ($1,651-1,655), driven by the increasing trend of world gold. One tael is equivalent to 1.2 ounces
Meanwhile, on the trading floor gold was selling at $1,223.20 per ounce. Reuters said gold futures jumped 2 per cent yesterday as bargain hunters resurfaced.
Gold plunged 28 per cent in 2013, ending a 12-year bull run, after the US Federal Reserve announced plans to unwind the ultra-loose monetary policy starting in January 2014, tarnishing the metal's appeal as a hedge against inflation. The gold price was nearly $700 below a record hit in 2011.
SBV also said that the implementation of the policy had significantly stablised foreign exchange rates. Commercial banks yesterday quoted the US dollar at VND21,115-21,130, which was almost unchanged against one week ago.
The central bank's governor, Nguyen Van Binh, last month announced that he would flexibly manage the exchange rate within a 2 per cent margin this year.
In 2013, SBV planed a 1 per cent margin in foreign exchange management, but the actual margin was about 0.6 per cent. —VNS