Gold retreats on central bank’s intervention

Despite a rise in global price, the price of gold in Vietnam dropped to below VND44 million a tael (1.2 ounces) on October 7 after the central bank of Vietnam took several actions to narrow the gap between domestic and international prices.

Vietnam’s central bank has allowed five banks, consisting of Asia Commercial Bank, Saigon Thuong Tin Joint Stock Commercial Bank, Vietnam Technological and Commercial Joint Stock Bank, Vietnam Export Import Commercial Joint Stock Bank, and DongA Bank, and Saigon Jewelry Company (SJC) to reopen offshore gold trading accounts.

These six institutions are expected to raise the supply in the domestic market by six tons of gold and they will buy and sell gold at the same price quoted by SJC.

Sacombank Jewelry Company bought gold at VND43.56 million and sold at VND43.94 million as of 10:25 am local time.

Saigon Jewelry Company, the biggest gold processor and trader in Vietnam, quoted the price at VND43.55 million for buying, and VND43.95 million for selling in Ho Chi Minh City.

Hanoi-based Phu Quy Jewelry Company purchased SJC-brand gold at VND43.75 million and sold at VND44.1 million at the same time.

Domestically, gold fetched VND2.25 million a tael higher than global price.

The interbank exchange rate surged for three consecutive days, gaining by VND5 per dollar to VND20,653. Vietcombank bought the greenback at VND20,856 per dollar, and sold at VND20,860 per dollar, an increase of VND6 per dollar over the previous day.

Meanwhile, dollar continued to drop on free market. The US currency was bought at VND21,380, and sold at VND21,470, at 10:45 am in Hanoi, a decrease of VND20 per dollar in buying price and VND30 per dollar in selling price over the previous day.

International, gold rose amid optimism that European officials were making progress in taming the region’s sovereign-debt crisis.

Gold for immediate delivery rose as much as $7.6 an ounce to close at $1,650.75 an ounce on the Comex in New York.

Gold futures for December settlement added nearly $10 an ounce to close at $1,651.9 an ounce.

Spot gold gained $7.8 an ounce to trade at $1,659.1 an ounce at 10:30 am Vietnamese time.

The euro exchange rate against the US dollar was at $1.34 in Tokyo at 11 am Vietnamese time.

Crude oil futures inched up $0.26 a barrel to trade at $82.85 a barrel on the New York Mercantile Exchange at the same time. – SGGP

Posted by VBN on Oct 8 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry