Gold slightly declines on stronger dollar

The price of gold in Vietnam dropped by 50,000 dong a tael (1.2 ounces) on May 16 as global price continued to decline due to a stronger US dollar and negative economic news from Europe.

Sacombank Jewelry Company bought the metal at 37.33 million dong and sold at 37.41 million dong as of 10 am local time.

Saigon Jewelry Company, the biggest gold shop in Vietnam, purchased gold at 37.33 million dong and sold at 37.4 million dong at the same time.

Meanwhile, Hanoi-based Phu Quy Jewelry bought SJC-brand gold at 37.3 million dong and sold at 37.41 million dong.

Domestically, gold fetched 300,000 dong a tael higher than global price.

Despite the heat on global market, trading on local bullion market remained muted as high saving rates and the government’s measures to tighten gold trading eroded the appeal of the precious metal.

Internationally, gold retreated under pressure of a strengthening US dollar.

In Asia, gold for immediate delivery fluctuated around $1,490 an ounce, down by $5-7 an ounce over the closing price in New York last weekend.

The euro was standing at the lowest level in the past six weeks against the US dollar as data showed that inflation in the US accelerated, raising the possibility that the US Federal Reserve would adjust its benchmark interest rate soon.

Moreover, Portugal might be the next European country to receive a rescue package to avoid financial crunch due to sovereign debt after Greece.

The euro exchange rate against the greenback was at $1.41 a euro in Tokyo as of 9:55 am Vietnamese time.

Holdings at SPDR Gold Trust, the world’s largest exchange traded fund backed by bullion, reduced by 13.14 metric tons last week, raising the number of gold sold in the past two weeks to 37.39 metric tons. The company currently holds 1,192.3 metric tons.

State-owned Vietcombank bought the US dollars at 20,550 dong, and sold at 20,630 dong. Sacombank quoted the exchange rate at 20,530 dong for buying and 20,650 dong for selling. – VIR

Posted by VBN on May 17 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