VietNamNet Bridge – The State Bank Governor issued a decision regulating gold bar trading procedures on Monday to prepare for the commodity's first official auction.

Gold bars for sale at Viet Nam Agribank Gold Corporation. The State Bank Governor issued a decision regulating gold bar trading procedures on Monday to prepare for the commodity's first official auction, which is expected to help close the price gap between the domestic and global markets.

In order to ensure enough gold bars for the auction, the central bank authorised four commercial banks to export non-SJC gold bars and import standardised gold from early February.

The combined volume of traded gold, performed by Techcombank, Sacombank, DongABank and VietABank, reached around 11 tonnes or 293,000 taels, said Nguyen Hoang Minh, deputy governor of the central bank's HCM City branch.

They will then convert material gold into gold bars.

In an online interview with Vnexpress, SJC chairman Le Hung Dung said that they could convert about 80,000 gold taels (3 tonnes) per day, helping local supply exceed demand.

The central bank has not revealed the volume of gold that will be sold to the market.

The central bank's gold bar auction is expected to help close the price gap between the domestic and global markets, which has been recorded at nearly VND5 million.

Industry insiders expected that the price gap would be roughly VND1-2 million per tael thanks to the auction.

They added that the price gap would also depend on the globally volatile price, meaning the central bank would have to keep a certain gap to minimise risks and ensure safety for the national foreign currency reserves.

The news that the SJC was processing gold bars for the central bank shrunk the price gap between the domestic and global market, but not as significantly as expected.

A representative from a gold bar trading company who declined to be named said that the domestic gold market had not seen significant changes after the news, except for a sell-off last month.

Phu Nhuan Jewellry Co (PNJ) hypothesized that participants in the market still had a "wait-and-see" mentality.

Yesterday, the gold price in the domestic market was VND44.01/44.08 million per tael – roughly VND3.5 million higher than the global price.

Source: VNS