May 12: Vietnam gold falls vnd200,000, interbank dollar at 2 week low

Local gold on May 12 fell by VND200,000 to VND37.48 million a tael as global spot gold fell to $1,501 an ounce in COMEX last night, the inter-bank dollar reference rate fell further by VND5 to VND20,693, lowest level since April 29.

As of 9:00 Hanoi time, Sacombank-SBJ gold as listed at VND37.360 million/tael and VND37.49 million/tael for bid and ask, respectively.

Bid and ask of Thang Long gold bullion, a product of Bao Tin Minh Chau were listed at VND37.37 million/tael and VND37.48million/tael for bid and ask, respectively.

SJC Hanoi was listed at VND37.4 million/tael and VND37.48 million/tael for bid and ask, respectively.

Local gold trading is reported sluggish after the local banks stopped gold lending activities since May 1 and amid tension of dong liquidity, high dong-denominated interest rates.

In New York trade last night, spot gold fell to about $1,501 an ounce. U.S. gold futures for June delivery settled at about $1,501, after trading from $1,495.40 to $1,526.80.

COMEX futures trading activity approached 150,000 lots, more than 50 % above its 30-day average, consistent with stronger volume during last week’s sell-off and the subsequent bounce, while U.S. gold volume was largely in line with its norm.

COMEX open interest, a measure of overall liquidity and trading activity, dropped nearly 10 % to under 125,000 lots from Thursday’s peak, indicating some investors were exiting their bullish bets.

“China is trying to contain inflation, and some of the measures it has enacted will likely to have an impact on economic growth. It’s another reason for people to take money off the table for commodities in the short term,” said Evan Smith, co-manager of U.S. Global’s Global Resources Fund, which has $1 billion assets.

Gold Volatility Down, Support Seen

CBOE gold volatility index a gauge of bullion investor anxiety, fell sharply in the past two sessions when gold prices rose. It bounced 1.8 % Wednesday.

Floor traders said falling costs of gold options indicate investors are expecting prices of underlying futures unlikely to fall further.

“The feeling in the market is that gold is in a range, and there is not much risk either way, going down or going up. So, option investors are willing to sell the volatility,” said COMEX floor options trader Jonathan Jossen.

In local money market, dollar midpoint rate fell by VND5 to VND20,693 a dollar sending the exchange cap down to VND20,900/$ on +/- 1% trading band basis. Banks continued to apply negative trading band, offering dollar at VND43-VND63 a dollar lower than midpoint rate.

Vietcombank, Vietnam’s biggest dollar trader, quoted dollar prices at VND 20,550 – 20,630, respectively for bids and ask, down VND20 from yesterday.

Sacombank quoted dollar prices at VND 20,510 – VND20,630, respectively for bids and ask, down VND20.

Eximbank quoted dollar prices at VND20,520 for bid and VND 20,640 for offer. – Stoxplus.com

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