Gold price falls as supply is to be replenished soon

The local gold price tumbled on Wednesday, shedding VND1.2 million to VND44.4 million a tael as the local supply will be replenished in the next one day or two after feverish trading on Tuesday.

Meanwhile, the global price as of 6.00pm Vietnam mean time increased by US$12.6 to US$1,756.7 an ounce, meaning the difference between the local and global price has narrowed sharply to VND400,000 per tael, excluding costs and taxes. A tael equals to 1.2 troy ounces.

Bullion traders will have their gold import delivered within the next couple of days.

Saigon Jewelry Holding Co. (SJC) is given the highest gold import quota at one ton. The company’s Deputy Director General Truong Cong Nhon said the gold would arrive on Thursday.

Meanwhile, Phu Nhuan Jewelry Joint Stock Co. (PNJ) will have some 500 kilos of gold arrive from Switzerland this Friday. Besides, such banks as Sacombank, Agribank and Vietinbank are also allowed to import between 200 and 500 kilos of gold until August 31.

Nguyen Thi Cuc of PNJ said though the time length permitted for importing gold is long, gold traders must make immediate orders due to global gold price volatility.

The gold import information has pulled down the U.S. dollar price in the unofficial market to VND21,050 per dollar for buying and VND21,150 for selling on Wednesday morning, a fall of VND200 against the previous day. The price continued to fall in the afternoon to VND20,800 and 20,900 for buying and selling, respectively.

In another event, the inter-bank foreign exchange rate was adjusted to VND20,618 to the dollar by the State Bank of Vietnam, up by VND10 from a month long rate of VND20,608.

Commercial banks immediately raised their quoted dollar prices toward the new permitted ceiling price at VND20,824, or 1% higher than the average inter-bank forex rate announced by the central bank.

Banks bought the dollar at VND20,800-20,820 in the morning and VND20,970-20,800 in the afternoon. Especially, Eximbank bought the greenback at VND20,760, or VND50 lower than the previous afternoon.

The strong volatility of the gold market in the past few days has led to the gold trading upsurge. For example, SJC has sold some 4,000-5,000 taels in the first two days this week.

However, the company witnessed gold transaction slow down on Wednesday with around 1,000-1,500 taels traded. The same happened to PNJ where the number of gold sales was halved.

Cuc of PNJ stated many people sold their gold to cut losses for fear that the gold price might decline further. – SGT

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