Gold nears VND42 mln

Domestic gold price Sunday surged some VND100,000 a tael day on day to VND41.98 million a tael, though its international counterpart remained unchanged since there was no trading at weekend.

With the new hike, some VND330,000 within Saturday and Sunday, the price gap between domestic and international gold price was over VND500,000 a tael. A tael is equal to 1.2 ounces.

In Hanoi, the ask and bid price of gold bullion produced by Saigon Jewelry Co, Vietnam biggest gold trader, were quoted at VND41.83 a tael and VND41.98 a tael at Bao Tin Minh Chau Jewelry Co.

In Ho Chi Minh City, since SJC, Phu Nhuan Jewelry Co and Sacombank Jewelry Co stopped trading at weekend as usual, their price remained unchanged day on day at VND41.66-41.84 million a tael.

The price was some VND1.75-1.8 million a tael higher week on week.

In the last two days, domestic gold shops in Hanoi were filled up with customers rushing to buy in fear of further price hikes in coming weeks.

But the trading atmosphere is the southern economic hub was far different with only a few buyers.

The main reason for the price hike, according to newswire Vneconomy, is due to rising domestic demand and recent circular of the Ministry of Finance tightening gold exports with stricter conditions and higher tax rates.

Export gold jewelry items with gold purity of more than 80 percent are also subject to export taxes of 10 percent, the same rate applying for gold jewelries with a purity of 99.9 percent.

Vneconomy’s source said the new regulation is expected to create a major barrier to the gold exports.

Meanwhile, recently, many businesses have hoarded alarge volume of gold for exports, which up to now have yet been shipped. So the price now is pushed up for those firms to sell out their gold as soon as market demand seems on a stable rise, the source revealed.

The world gold price is expected to go up next week because of EU economic uncertainties and the U.S. credit downgrades, according to Kitco.com.

Nevertheless, there remains potential for a technical correction or profit-taking, after such a sharp run-up lately, or, as one trader commented—“too much of a good thing”, said the newswire. – Tuoitre

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