Aug 24: Vietnam gold plunges to vnd47.6mln/tael, gold premium falls on big boys intervention

Vietnam gold today opened down sharply to VND47.6 million/tael for the first time this week following a plunge in global market but still trading at a premium to world gold prices.

As of 9:00 Hanoi time, Sacombank-SBJ gold was listed at VND47.46 million/tael and VND47.65 million/tael for bid and ask, respectively, falling VND1.3 million ($60) a tael from yesterday morning, in line with a loss of $60 in the global market.

SJC in Hanoi was listed at VND47.35 million/tael and VND47.67 million/tael for bid and ask, respectively falling VND1.25 million an ounce from yesterday morning.

With some intervention of local gold traders with support from the central bank, local gold premium eased to $47/ounce compared with yesterday $52/ounce.

It is reported that three big local gold traders SJC, PNJ and SBJ sold a combined number of 18,000 tael on August 23 in an effort to pull down local gold premium with support from the State Bank of Vietnam.

In details, SJC sold over 10,000 tael, PNJ sold 3000 tael and SBJ sold nearly 5,000 tael at around VND100,00-200,000 discount to market prices. People, including retail gold shoppers, are reported to queued to buy gold yesterday. The biggest individual lot was recorded at 1,000 tael for a man in Ho Chi Minh city.

The State Bank of Vietnam aimed firstly to narrow the gap between local and global gold prices to VND300,000-400,000 premium or under 1% and then to ensure a close parity between the local and global gold prices.

Nguyen Thanh Long, SJC’s CEO said the company has completed procedure to import 500kg of gold on August 23 and will receive it within 48 hours. Long and Nguyen Thi Cuc, deputy CEO of PNJ said there will be enough gold supply to meet local demand.

Global markets: Gold Has Worst Day in 18 Months

In the spot market, the precious metal fell almost $90 or 3.7% from a record high $1,911.46 overnight to $1,826.60, its biggest one-day percentage loss since February 2010.

U.S. December gold futures settled down $30.60, or 1.6% at $1,861.30 an ounce. After the close it extended its slide to below $1,830. Trading volume was near 370,000 lots, set to be one of the heaviest trading days this year.

Overnight, a hike in margin requirements for gold forwards on the Shanghai Gold Exchange helped curb gold’s scorching rise.

Bernanke speech eyed

All eyes will be on Federal Reserve Chairman Ben Bernanke’s speech at Friday’s central banker meeting in Wyoming’s Jackson Hole.

Analysts said anything short of a third round of quantitative easing would likely provide limited support for gold as the Fed had already vowed to keep interest rates low into 2013.

“There is some potential degree of ‘Buy the rumor, Sell the news’ on any future Fed policy that may come out at Jackson Hole. Investors might want to have that on the back of their minds as well,” said Michael Cuggino, portfolio manager of the $15 billion Permanent Portfolio Funds.

SPDR Gold Trust Holdings Sells Out Gold That I Bought Early This Month

Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 24.83 tons to 1,259.57 metric tons by Aug 23, the lowest level this month.

SPDR Gold Trust was the one that bought high and sold higher as on August 22, 23 SPDR Gold Trust sold a combined of 31.19 tons of gold equals to the size that it bought early this month.

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

Dollar prices

Vietnam’s central bank raised the U.S. dollar’s exchange rate to VND20,628 after keeping it unchanged for 12 days, local banks raised dollar bids to VND20,830 close to the ceiling price of VND20,834 on expectation of further gold imports.

In August, dollar prices in Vietnam has risen 0.97% after two upward adjustment on August 10 and August 24, VND10 each. – Stoxplus.com

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