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Gold price gap widens as SBV ends auctions

Update: September, 07/2013 - 10:24

HA NOI (VNS)— The disparity between domestic and global gold prices increased once more, after the State Bank of Viet Nam abruptly ended its weekly gold auctions, seeing the popular commodity settling at VND3.3 million (US$157) higher per tael than world gold prices.

This week, the State Bank of Viet Nam brought its auctions to a standstill after it sold 1,517,200 taels, out of the 1,622,000 taels on offer, between March and August this year.

"The key factor expanding the gap between local and global prices is the suspension of the gold auction," said a representative of the Viet Nam Gold Trading Association who asked to remain unnamed.

"The demand is so-so, but the gap would increase if no gold auction was held," he added.

The Sai Gon Jewelry Company (SJC) yesterday reported a drop of 0.26 per cent (VND100,000) against previous transactions, with the buy price per tael (1.2 ounces) settling at VND38,2 million, and the sell price at VND38,3 million.

Matching the trend, the global spot price for gold dropped a full 1 per cent yesterday to rest at US$1,365.05 an ounce. The overall gap between the two markets surged due to the price drops.

The bank's sales generated a profit of more than VND6 trillion ($272.72 million) largely due to the significant differential between the over-heated domestic gold price and the lower global price. — VNS

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