Sep 29: Vietnam gold extends loss, dollar stable

Vietnam gold fell further by VND0.5 million to VND44.4 million a tael this morning after the central bank allowed more gold quota yesterday and on tracking global gold fall last night. Local dollar prices were stable.

At the open, local gold plunged, briefly breaking down VND44 million/tael threshold but it soon pared the early losses.

As of 8:30 Hanoi time, Sacombank-SBJ gold was listed at VND43.61 million/tael -VND44.19 million/tael for bid and ask, respectively.

As of 8:45 SJC in Hanoi was trading at VND44 million/tael and VND44.42 million/tael for bid and ask, respectively compared with the open prices of VND43.5-VND43.92 million/tael.

Rong Thang Long gold, a product of Bao Tin Minh Chau company was traded at VND43.75 million-VND44.45 million a tael.

The spread between gold bids and asks was VND0.4-0.7 million/tael compared with VND0.5-1 million /tael yesterday and domestic gold premium rose back to VND4 million/tael or nearly 9% .

The wide gap between local and global gold prices threatened the stability of forex market, analysts noted.

Global Markets: Correction Continues

In New York trade last night, gold fell 2.5% as the U.S. dollar gained on doubts over the progress of Europe’s efforts to tackle its debt crisis.

In Asia trade this morning, spot gold [lost $3.55 an ounce to $1,604.35 by 0221 GMT. U.S. gold futures fell $9.4 to $1,608.7 an ounce.

“The dollar is likely to strengthen on a broad scale, at least short-term. That’s definitely going to be weighing on performance. Closer to the 200-day daily moving average, we should find the bottom and I think that’s still there,” Reuters quoted Dominic Schnider, an analyst at UBS Wealth Management as saying.

Premiums for gold bars in Asia are now at their strongest since at least February in Singapore and Hong Kong. In India, the premiums jumped to their highest in a year.

“Physical demand is still there. Everyone in Asia is buying. Everybody is buying gold and they want delivery,” Reuters quoted a physical dealer in Singapore as saying. “We have stocks of gold bars, but it’s not enough to satisfy demand,” said the dealer, adding that buyers came from India, Singapore, Indonesia and Thailand.

In `dash for cash`, gold ETF investors hold on

Holdings of the largest gold-backed exchange-traded-fund (ETF), SPDR Gold Trust, remained unchanged on Wednesday.

The loss of confidence that caused gold prices to fall 10 percent in the four days through Monday has not yet unnerved investors in the leading gold exchange traded fund, nor caused futures traders to close out positions en masse, Reuters reported.

The resilience of retail and professional traders in the face of heavy selling — much of it said stemming from hedge funds eager to dress up end-of-quarter performance or pay margin calls in other markets — supports the idea that bullion’s shudder was a correction, not the end of its run.

Physical gold holdings by the SPDR dipped only 0.8 percent during gold’s four-day slump, despite prices falling by as much as 15 percent over that period, according to the latest holdings data released on Tuesday.

Many market watchers said that the popularity of the gold ETFs has played a key role in fueling the metal’s decade-long bull market. It has rallied from just $250 an ounce in 2001 to around $1,650 on Tuesday.

Since its launch in November 2004, the No. 1 SPDR Gold Trust has added over 1,250 tons of gold, slightly more than China or Switzerland.

In late August, SPDR Gold briefly surpassed SPDR S&P 500 ETF to be the world’s biggest ETF.

Local Dollar Stable

Vietnam’s central bank kept the U.S. dollar’s exchange rate to VND20,628 unchanged for a 31 days. Banks mostly keep their dollar prices unchanged. Dollar prices in gold shops in Hanoi stood still at VND21,220 -21,280 for bid and ask respectively.

Source Ruby/ News Writer/ StoxPlus

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