Gold prices sparkle

Backed by the world’s price increases, the gold domestic price this morning soared by 600,000 dong per tael over yesterday, hitting the 28 million dong per tael threshold.

The gold market opened this morning with new quoted prices. One tael is equal to 1.2 ounces and the gold prices were quoted at 27.85-27.90 million dong per tael (purchase) and 27.90-28 million dong (sale). The prices represent the sharp increase of 600,000 dong per tael over late yesterday.

The gold price rose in early December 2009, hitting the 28 million dong per tael threshold. Since then, the gold price had been continuously decreasing, hovering around 26-27 million dong per tael until May 7, 2010, when the gold price exceeded 27 million dong per tael.

Saigon Jewelry Company SJC at 8.56 am this morning quoted the SJC gold for HCM City at 27.90-28 million dong per tael (purchase and sale). In Hanoi, Phu Quy Company quoted SJC gold prices at 27.89 and 27.98 million dong per tael, respectively.

Meanwhile, Sacombank-SBJ at 7.45 am quoted the prices at 27.87 and 27.91 million dong per tael, respectively.

In the last 10 days, the domestic gold price has increased by 1.3 million dong per tael, creating a new price increase wave after a long period of unclear tendency. The gold price has increased by 650,000 dong per tael so far this week.

Vietnam witnessed ‘gold fever’ in November 2009, when the gold price was pushed up by the world’s price, high dong/dollar exchange rate, high purchasing power, and because the supply which was thought to be low at that time.

Meanwhile, the main reason behind the gold price increases now is the high price in the world market, not high demand or short supply. The purchasing power remains weak, because people do not worry about the precious metal short supply. Besides, people do not rush to purchase gold because it is unprofitable to deposit gold at banks which just offer low interest rates for gold deposits.

According to Thoi bao Kinh te Vietnam, despite the price increases, the market remains quiet. Gold trading companies which have headquarters on Tran Nhan Tong street, which is called the ‘gold market’ of Hanoi said that they still cannot see any big changes with the transactions. People do not want to sell gold at this moment, because they hope that the gold price would escalate further

A person, who purchased gold in early February at 26 million dong per tael and sells gold at this moment, would get the profit of two million dong per tael, or 7.5 percent.

Experts have estimated that the domestic price is 400-500,000 per tael lower than the world’s price, if considering that the dong/dollar exchange rate is 19,050 dong per dollar.

The world’s gold price had been escalating after Europe unexpectedly announced the $1 trillion bailout package. The huge package has made investors panic and worry about uncertainties. When investors panic, they tend to pour money in tangible assets, especially gold

However, after rising sharply, the gold price slightly decreased in the world market. At 9.30 am Hanoi time, the gold price in Asia was 1228.4 dollar per ounce, down by $4/oz from May 11.

Thoi bao kinh te Vietnam

Tags: vietnam gold, Vietnam gold exports, Vietnam gold market