The sale of gold bullion at the State Bank of Vietnam (SBV) and Vietnam’s gold powerhouse Saigon Jewelry Co (SJC) has flourished these days with ever-rising demand.

While the central bank has so far sold about 55 tons of gold bullions under SJC brand to the market, the gold powerhouse said it has run out of small-valued gold bullions as demand surged in the last 2 months. SBV today (Friday) successfully sold 25,800 out of 26,000 taels of gold bullion to 18 bidders, including authorized local banks and dealers, at a price of VND38.06-38.1 million a tael in its 53th gold bidding session.

With the new sales, SBV announced it has so far sold over 1.42 million taels of gold bullion, or around 54.86 tons of gold, out of 1.53 million taels of gold brought to the auctions.

Of these, approximately 40 tons are used to cover local banks’ gold accounts so that those accounts could be sufficient to be closed down by June 30 this year in accordance with SBV’s requirement. SBV has also announced that it will hold only two gold bidding sessions starting this week.

The price difference between the average converted winning bid price of gold bullion and the world price at the same time today shrunk to about VND3.16 million per tael, the lowest gap since the central bank started its bidding session early this year.

The situation is similar at SJC, as Nguyen Cong Tuong, deputy head of SJC sales department, said it has run out of small-valued gold bullion, from 1/20 tael to ½ tael.

About 1-2 months ago, there were still some hundreds taels worth of such small-valued gold bullion in SJC’s stock, but due to demand from the people and banks, the stock has dried up recently, he said.

SJC has recently sought for the State Bank’s permission to refine the small-valued gold bullions for the market, but yet been approved.

On a rise

According to the World Gold Council (WGC), the demand for gold jewelry and gold bullion in Vietnam rose simultaneously in the second quarter with 23.2 tons of gold in total, up 24 percent compared to the same period in 2012.

As reported by the WGC, during the period, gold jewelry consumption in Vietnam reached 3.2 tons, up 25 percent compared to the same period last year, while that of gold bars and gold coins was at 20 tons, equivalent to an increase of 23 percent over the same period last year.

In terms of value, the country may have to spend some $ 1,057 billion on buying those sums, including $147 million and $910 million for gold jewelry and gold bullion/coins, respectively.

Compared to the same period last year, the investment value of gold jewelry increased by 10 percent, while that of gold bars and gold coins increased by 9 percent, said WGC.

However, in the 12-month period ending by the second quarter of 2013, the consumption of gold jewelry, gold bars and gold coins of Vietnam reached 77.4 tons, down 26 percent year on year. In terms of value, gold investment in this period was at only $3.963 billion, down 30 percent over the same period.

Global gold consumption increased due to positive sentiment of buyers in emerging markets after the price of gold fell to a record low, according to WGC global gold consumption report Q2/2013.

Global gold consumption increased by 53 percent compared to the same period last year, bringing the total amount of gold jewelry, gold bars and gold coins purchased in the second quarter to more than 1,083 tons.

In particular, India's gold consumption topped the list with 310 tons, followed by China with 275.7 tons.