The State Bank of Vietnam (SBV) has enough gold bullions that can be sold on a large scale to intervene in the local gold market to ensure its stability, said a senior official of the Vietnam’s central bank.

If there are more fluctuations in the gold market, SBV will jump in to stabilize it, said SBV Deputy Governor Dao Minh Tu in a press release on Sunday afternoon.

Though the gold prices in domestic market have fluctuated over the past few days, through monitoring and analyzing market information, SBV has not found any trace that those changes in price may have been caused by the fluctuations in the world market or the gold supply and demand in the market, said Tu.

Thus, the central bank can confirm that those fluctuations in gold prices on the domestic market over the time are mainly due to psychological factors, he said.

Someone has taken advantage of the tension in the East Vietnam Sea to speculate gold bullions and cause price hike, leaving a psychological impact on local buyers.

As a result, SBV warns local people to be cautious when deciding to buy or sell gold bullion to avoid unnecessary losses, Tu added.

This is the first time in 2014 the agency said it will likely resume its gold auction activity, an activity that was stopped with the last section held on December 28, 2013. 

Previously, the local financial market operator had twice sent the same messages of confirming the stability of the local market.

Most recently, on May 20, the State Bank of Vietnam also warned people to be cautious before making the decision to buy or sell gold to avoid unnecessary losses due to psychological factors or being agitated by some bad people.

Last week , the domestic price of gold bullions refined by Saigon Jewelry Co – Vietnam’s biggest gold trader and refiner, continued to rise by VND300,000 a tael to VND36.85 million per tael, which equals to 37.5 grams.

Given the official foreign exchange rates, import taxes and other fees levied on gold bullion trading activity, domestic price was some VND4 million a tael higher than the world prices.

Since early 2014 , the domestic gold market is quite stable with the difference in the world and local gold price  pretty much narrowed down to even about VND1 million a tael.

The stability in the gold market is said to be maintained due to SBV’s gold auctions, which supply more gold to authorized local banks and traders starting 2013.

SBV has launched 76 auction sections since the first auction section taking place on March 28, 2013.

In the 76 sections, the highest bidding price was recorded in the first section, at VND43.81 million a tael, while the lowest rate fell on the last section, at VND34.65 million per tael.

Through bidding, the State Bank of Vietnam has sold a total of 1.82 million taels of gold billions, equivalent to 69.9 tons.