Central bank sells 26,000 taels at 3rd bullion auction

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The State Bank of Vietnam held its third auction of gold bullion April 5, again managing to sell nearly 26,000 one-tael (37.5 grams) bars like in the previous auction.

The bank has been auctioning gold from the national reserve for jewelers and banks to buy.

Since May last year SJC has been the country's sole producer of gold bars.

At the auction buyers bought 25,700 taels at VND43.2-43.22 million (US$2,064-2,065) out of the 26,000 that are offered each time.

The previous auction was held a day earlier.

The bank said through the three auctions it had brought an additional supply of two tons of gold into the market.

But its prices were around VND400,000 per tael higher than at jewelers' whose prices were in turn around VND4 million ($191) higher than global prices as of April 5.

The first auction on March 28 attracted criticism from economists who said they wondered if the central bank was trying to bridge the gap between domestic and international prices or the demand-supply gap.

Nguyen Quang Huy, chief of the central bank's foreign exchange division, said the bank is seeking to stabilize the market, and not bridge the gap in the prices.

The floor price was "appropriate," he claimed, noting that the central bank had to consider many factors since the gold was "the government's property."

The central bank has announced three more auctions on Tuesday, Wednesday, and Friday next week.

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