After unexpectedly cancelling a gold auction on April 22nd, the State Bank of Vietnam (SBV) has sharply reduced its reference price for an upcoming gold sale.

The SBV has lowered its reference price for gold bars to VND 80.70 million (USD 3,185) per tael, down from the previous price of VND 81.80 million (USD 3,230) per tael announced on April 19th.

The rescheduled gold auction will take place on April 23rd and will offer 16,800 taels of SJC gold bars, a standard product of the SBV. The minimum bid has been set at 1,400 taels with a maximum of 2,000 taels permitted.

These auctions are a key component of the SBV's efforts to manage the country's gold market.

This sudden cancellation and price reduction raise questions about the SBV's gold market strategy. The initial cancellation was reported to be connected to a lack of buyer interest due to the high starting price. The reduced reference price suggests the SBV is attempting to stimulate demand.

Historically, Vietnam's central bank has occasionally used gold auctions to inject liquidity into the domestic market and influence the price of the Vietnamese dong. However, the recent price of gold has been trending downward, potentially reducing the effectiveness of this approach.

The SBV's actions will likely affect gold prices in Vietnam and may have broader implications for the currency market. Investors and analysts will be closely watching for further developments to gauge the central bank's intentions and the potential impact on the Vietnamese economy.