SJC asked to sell gold to stabilize gold prices

The State Bank of Vietnam (SBV) on the morning of February 5 announced measures to stabilize the domestic market, saying it will ask the Saigon Jewelry Company (SJC) to sell SJC bar gold to help bring domestic prices closer to the world prices.

SBV also said it will apply necessary measures to stabilize the gold market in order stabilize the goods market at Tet.

The domestic market is witnessing the sharpest price decreases since mid November 2009.

At 9.45 am on February 5, bar gold of differing brand names was traded at 25.9-26 million dong per tael, which means that the gold price has lost 500,000-550,000 dong per tael compared to the previous morning.

In the world market, the gold price (spot delivery) also lost $46.1 per ounce last night, or 4.2 percent, closing at 1,064.2 per ounce. According to Bloomberg, this was the sharpest gold price reduction in the world since 2009.

The world price has recovered slightly this morning to 1,064-1,066 dollar per ounce, which is equivalent to 25.35 million dong per tael. As such, the domestic price is some 600,000 dong per tael higher than the world’s price.

As the world gold price fluctuates, a lot of enterprises have been widening the purchase-sale gap in order to minimize risks. However, the price reduction to below 26 million dong per tael has been described by Sacombank SBJ as a good sign which encourages purchasing power.

Reuters, quoting analysts, said that the gold price is likely to stay at above 1,000 dollar per ounce.

Also according to the State Bank of Vietnam, gold trading floors are taking hectic preparations to shut down floors. Many gold floors said that they plan to shut down in February 2010, before the deadline set by the State Bank of Vietnam at March 30, 2010.

VietNamNet/VNE, TBKTVN

Tags: Vietnam gold market, Vietnam gold prices