The auction of nearly 17,000 taels of gold will take place tomorrow (April 23) at 10am, the State Bank of Vietnam has announced.

A gold store in Hanoi. Photo: Vietnam News Agency

Bidders have until 5pm today (April 22) to make their deposits.

The auction was planned for 10am today (April 22) at the State Foreign Exchange Reserve Management Department. However, it was canceled by the central bank as it failed to attract a sufficient number of bidders, while some committed bidders had not made deposits.

Gold prices in Vietnam fell slightly following the announcement. As of 9:40 am, buying prices at gold trading companies fell by VND1.25-1.58 million ($49-62) per tael to VND80.07-80.55 million ($3,146-1,165) per tael. Meanwhile, selling prices were down by VND700,000-850,000 ($27.5-33.4) per tael to VND82.90-83.2 million ($3,257-3,269) per tael.

The gap between domestic and international gold prices continued to narrow to around VND8 million ($314.4) per tael.

As announced last week, the central bank was expected to sell 16,800 taels of gold bullion to the market to increase the supply and ease the market prices, which have been driven up by concerns over geopolitical tensions and the economic crisis.

A 10% deposit is required to qualify as a bidder. The reference deposit price is set at VND81.8 million ($3,214) per tael, with a bid increment of VND10,000 ($0.4).

There are 100 taels in each lot. Each company is allowed to bid for 1,400-2,000 taels, which corresponds to 14-20 lots. They are only allowed to bid a minimum price equal to or higher than the floor price. 

The auction, which is also the first to be held since 2013, is open to 15 companies.

According to business insiders, the minimum price of VND81.8 million ($3,214) per tael would be too high. Gold companies will not try to bid too much for the gold as they have to think about selling first.

Gold prices have been fluctuating in a wide range recently, and high bid prices can lead to losses for companies in the market. Therefore, they may consider buying gold from the market.

Vice Chairman of the Vietnam Gold Trading Association Huynh Trung Khanh said the amount of 16,800 taels, equivalent to 630 kilograms of gold bullion, is a large volume.

Market prices will depend on the auction, he said, adding that the market has been quiet in recent days as traders and people wait for the results of the auction.