In an odd turn of events, a gold auction slated for yesterday was cancelled due to a lack of interest and a second, today, had just two bidders that bought a collective 3,400 taels of gold of the 16,400 on offer, VN Express is reporting. This is after gold auctions were touted as a means by which to bring down the domestic price of gold which runs about 15 percent higher than world gold prices.
The article notes that the last time the SBV carried out gold auctions, back in 2013, banks had been allowing consumers to deposit gold which the banks were then able to use as collateral to borrow from other banks. The State Bank, however, put a stop to this and forbade banks from converting existing gold deposits into hard currency. With this in mind, when the SBV last auctioned gold, banks needed to buy it in order to return gold to customers who had made gold deposits. This time around, however, banks are not heavily invested in the gold market and, therefore, are apparently not interested in buying gold.