Gold auctions still attracting buyers

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In a gold auction held on Wednesday, the central bank only had 100 taels unsold among 40,000 taels on offer while the bidding on Tuesday sold out all the offered volume. The central bank, meanwhile, earlier informed that local banks already had enough gold to settle all arrears on Sunday.

As of Wednesday, the gold volume launched onto the market via auctions totaled about 39 tons, up nearly 10 tons from the initial forecast.

Gold buying demand for settlement of gold arrears has been satisfied, Le Minh Hung, deputy governor of the State Bank of Vietnam (SBV), said. However, he noted, many lenders have bought gold via auctions to help gold borrowers repay the precious metal to the banks before the due date as this is also one of the ways allowing them to settle lending position.

Outstanding gold balances stay at around 200,000 taels, equivalent to 7.5 tons. Gold buying via biddings now is adopted by those banks having demand.

At present, Asia Commercial Bank (ACB) is also negotiating with customers to convert gold loans into Vietnam dong and let the borrowers enjoy preferential rates to stop gold mobilization and lending completely. ACB now buys gold from auctions in order to sell gold to residents and to borrowers intending to service gold loans to the lender, said Nguyen Thanh Toai, ACB deputy general director.

In the next few days, gold biddings will still be carried out to meet demand from enterprises and banks and SBV will stop doing the job when local appetite cools.

As for gold deposits converted into gold custody services at local banks, Hung said SBV had told banks to make reports, so specific data is not yet available.

The opening price of one tael of gold quoted at Saigon Jewelry Holding Company was VND36.3 million for buying and VND37.1 million for selling on Wednesday morning, which then picked up by VND500,000 per tael to VND36.8 million and VND37.6 million respectively at 4:30 p.m. on the same day. Global gold prices, in the meantime, only inched up US$5.3 an ounce against the closing session in the New York market on Tuesday night.