The State Bank of Vietnam has announced that it will put up only 2,000 taels of gold for auction, down 6,000 taels compared to previous auctions, at the 56th gold auction that will take place on August 28.
This move by the bank indicates that demand for gold has started to decline in the local market, especially after gap in domestic and global gold price has narrowed.
On August 27, the gap reduced to around VND2.4 million per tael.
With total amount of 1,477,800 taels of gold, or 56.8 metric tons of gold, the State Bank had to spend nearly US$3 billion to import gold.
Thus, it is rational that the amount of gold put up for auction is reduced, so as not to affect the central bank’s foreign currency reserves.