Aug 15: Vietnam gold extends losses, dollar stable

Vietnam gold continued to fall VND300,000 a tael today following suit of global profit taking. Dollar prices were stable.

As of 10:20 Hanoi time, Sacombank-SBJ gold was listed at VND44.21 million/tael and VND44.39 million/tael for bid and ask, respectively.

SJC in Hanoi was listed at VND44.15 million/tael and VND44.42 million/tael for bid and ask, respectively while SJC in the free market was quoted at VND44.1 million-VND44.48 million a tael for bid and ask respectively.

Global markets:

Gold declined for a third day, set for the worst losing run in seven weeks on rising equities.

Spot gold fell 1.1% to $1,728.40 an ounce, and traded at $1,739.42 at 9:20 a.m. in Singapore.

December-delivery gold also dropped for a third day, losing as much as 0.7 %to $1,730.80 on the Comex in New York.

Market watchers said the rebound in the equity markets and the CME Group’s decision to raise margins on gold futures helped to cut some of the gains in gold. The CME Group is the parent of the Comex.

Gold prices could see some weakness this week if equity and other financial markets stabilize and concerns about the public indebtedness ease somewhat, market watchers said, but losses could be limited.

“Gold is currently overheated after a very sharp rally that was very terse in nature, which left it vulnerable to profit-taking,” said Sterling Smith, commodity trading adviser and market analyst with Country Hedging.

The equity markets in Europe received some support from a short-term ban on short-selling by France, Italy, Belgium and Spain. Once that ban is lifted, stock markets could become heavy again because of banking worries there, he said.

He wouldn’t be surprised if gold trades down to the $1,650 area, but said “I would be a very interested buyer there, depending on the condition of the world at that time.”

Jimmy Tintle, analyst at Transworld Futures, noted there is a gap on technical charts around $1,650, which is why some traders believe gold could pull back to that level. He doesn’t think gold prices will fall that far.

Analysts see critical support is at $1,550 and if gold prices break through that level, then gold prices may have peaked.

That level is distant — so far – and other technical analysts have said the $1,680 to $1,650s area offers a closer level of near-term support.

“Gold prices remained under pressure as investors continued to shift back into equities at a measured pace,” James Steel, an analyst at HSBC Securities USA Inc., wrote in a note to clients.

SPDR Gold Trust Sells Gold for Second Day

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust dropped to 1,260.17 metric tons as at Aug 15 from the previous session of 1,272.894 metric tons.

SPDR’s holdings’ record-high was 1,320.436 tons on June 29 last year.

Hedge funds and other money managers trimmed their net-long gold positions by 18 percent to 203,573 contracts in the week to Aug. 9, data from the U.S. Commodity Futures Trading Commission showed.

Dollar prices

Vietnam’s central bank set the U.S. dollar’s exchange rate at VND20,618 on Thursday, unchanged for 5 days.

Commercial banks this morning sell dollar mostly at the ceiling rate, VND20,824. – Stoxplus.com

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices