A gold auction of State Bank of Vietnam–SBV–gold reserves slated for Monday was cancelled and a gold auction that went ahead Tuesday had just two bidders, as a result of floor prices that were too high, VN Express is reporting. It also says that the minimum volume, of 1,400 taels or about 53 kilos of gold was too much.
According to VN Express:
“Analysts said the auction failed to attract businesses because the central bank was trying to profit from it like an enterprise rather than fulfilling its role as a regulator though it has zero risk in holding it.”
That aside, the SBV’s gold auctions don’t really make a lot of sense. Essentially, the goal is to bring down the price of gold by adding more to the market at a lower cost than it can currently be bought. Knowing that, it doesn’t really make sense to buy said gold with the simple act of doing set to reduce its value–Effectively, this whole operation has made the direction of the local gold price in the immediate future a known entity: it’s going down. That being the case, why buy now when it will likely be cheaper later?