Gold prices drop after Tet holiday

Domestic gold prices lost VND170,000 per tael (one tael equals 1.2 ounces) late yesterday, February 22, to close at VND26.76 million (US$1,400) per tael after slightly surging in the morning, driven by attempts by policy-makers to stabilise the market and gold moves on the global market.

In Ha Noi yesterday evening, Sacombank Jewellery Co listed buy/sell prices for SBJ gold bars at VND26.67-26.69 million. Sai Gon Jewellery Holding Co (SJC) quoted prices for SJC bars at VND26.68-26.78 million per tael while Bao Tin Minh Chau Gold and Jewellery Co were offering its Dragon gold bars at VND26.63-26.73 million.

In HCM City, gold was being traded at VND26.60-26.67 million per tael.

Gold dealers reported little trading after Tet, however, buyers outnumbered sellers yesterday.

To stabilise the gold price, the State Bank of Viet Nam has asked the SJC to sell more gold and the company has announced it would import additional gold after importing four tonnes before Tet.

“Most of the gold bars on the market are sourced by the SJC. We will balance supply and demand of gold bars on the market to bring domestic prices closer to global prices,” said an off-the-record SJC employee.

Last year was marked by record high domestic gold prices but many gold experts assumed gold prices are highly unlikely to pass VND29 million this year.

“The central bank has been implying a tightening of monetary policy, that means people will not have much money to buy gold,” said Nguyen Thi Cuc, general director of Phu Nhuan Gold and Jewellery Co.

While stressing the forever-attractive character of gold, General Director of Bao Tin Minh Chau, Vu Minh Chau said: “Gold prices will decrease in the first half of this year due to a strong recovery in the US dollar. But in the latter part of the year, gold prices may increase.”

If the US Federal Reserve were to increase the US dollar interest rate and tighten monetary policy, the US dollar would increase further in value, leading to a slide in the price of gold, Chau added.

Chau advised investors: “People should buy gold only when domestic and global prices are about 1-10 per cent of difference. Any bigger difference holds many risks and is unstable.”

On global markets yesterday, gold jumped to its highest price in a month, spot gold hit an intraday high of $1,130 an ounce and was quoted at $1,126 in Asian trade, up $9.05 from New York’s notional close on Friday.

Investors have poured money into gold as a hedge against currency volatility due to fears about debt defaults in the euro zone, while the metal’s steady rebound since falling below $1,100 also ignited technical buying. Dealers expect gold to eventually test January highs at around $1,150.

VietNamNet/Viet Nam News

Tags: Vietnam gold market, Vietnam gold prices