Central bank expects gold prices to decrease further

By Minh Son June 4, 2024 | 08:11 pm PT

Gold bars sold at a bank in Hanoi. Photo by VnExpress/Giang Huy

Domestic gold prices might continue to drop, the State Bank of Vietnam has said amid its efforts to narrow their gap with global prices.

"People need to be 'very cautious' when buying gold as prices are highly volatile," Dao Xuan Tuan, director of the central bank’s foreign exchange management department, warned Tuesday.

Prices of Saigon Jewelry Company (SJC) bullion fell by VND1 million (US$39.36) per tael on Tuesday to VND79 million. A tael equals 37.5 grams or 1.2 ounces.

Prices were down VND11 million per tael, or 12%, from a week earlier.

It has been two days since SJC and four state-owned lenders, Agribank, BIDV, VietinBank, and Vietcombank, started selling bullion to the public at prices lower than market rates as part of the central bank’s plan to bridge the gap between domestic and global prices.

People have been flocking to banks and SJC stores to buy gold, resulting in a massive surge in demand.

They quickly ran out of stock minutes after opening on Monday.

On the international market, the precious metal was trading at around $2,346 per ounce, equivalent to VND72 million.

The rapid decline in domestic prices has narrowed the gap to VND7 million per tael from the earlier VND18-20 million.