The State Bank of Vietnam is ready to intervene in the market.

If the gold market continues to fluctuate, the State Bank of Vietnam is always ready and has sufficient gold reserves to intervene strongly and on a large scale when necessary, to ensure the stability of the domestic gold market.

Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, confirmed this in a news bulletin recently published on the State Bank of Vietnam's website.

Illustrative photo: VNA

Prices increased due to psychological factors.

According to Mr. Dao Minh Tu, domestic gold prices showed signs of increasing during the weekend of May 22-24. However, after monitoring and analyzing market information, the State Bank of Vietnam did not find any contributing factors related to fluctuations in global gold prices, gold supply and demand in the market, etc.

Therefore, the State Bank of Vietnam affirms that the fluctuations in gold prices in the domestic market recently were mainly due to psychological factors and the exploitation of these psychological factors, influenced by the instability in the East Sea. There may have been speculative elements manipulating prices or inciting sentiment to push gold prices higher.

In fact, during the first few months of 2014, the domestic gold market was quite stable, with domestic gold prices fluctuating in line with international gold prices and reflecting the supply and demand of gold in the market. The difference between domestic and international gold prices narrowed considerably, at times falling to around 1 million VND.

The State Bank of Vietnam is ready to intervene.

However, in the past few days, gold prices in the domestic market have fluctuated upwards. To ensure the stability of domestic gold prices, the State Bank of Vietnam believes that the most important issue is to provide timely and comprehensive information to the public.

"Therefore, the State Bank of Vietnam is using various information channels to explain and advise people to be cautious when deciding to buy or sell to avoid unnecessary losses due to psychological factors or being incited by some opportunistic business people," Mr. Tu said.

According to Mr. Dao Minh Tu, market developments in recent days show that the State Bank of Vietnam's assessment and analysis of the market were correct, and based on that, the measures taken were sufficient, timely, and effective.

In fact, the market has self-corrected and is gradually returning to a more balanced state. Trading volume is gradually decreasing, and the price of gold in the domestic market has adjusted downwards by 800,000-900,000 VND/ounce in recent days compared to the beginning of the week, while the price of gold in the international market remains stable within a narrow range.

However, on May 23rd and the morning of May 24th, gold prices showed signs of a slight increase.

The State Bank of Vietnam (SBV) is still closely monitoring the market. "If gold prices continue to fluctuate, the SBV is always ready and has sufficient gold reserves to intervene strongly and on a large scale when necessary to ensure the stability of the domestic gold market," Mr. Dao Minh Tu affirmed.

According to chinhphu.vn