Vietnam gold soars on global trend, Dong strengthens, negative band applied

Local gold on April 28 surged by VND250,000 at the open before easing back VND70,000 to around VND37.7 million a tael on global gold rally, the dong extended gain by VND5 on “abundant” dollar supply.

As of 8:50 Hanoi time, Sacombank-SBJ gold as listed at VND37.61million/tael and VND37.6 9million/tael for bid and ask, respectively.

Bid and ask of Thang Long gold bullion, a product of Bao Tn Minh Chau were listed at VND37.56 million/tael and VND37.71 million/tael for bid and ask, respectively.

SJC in Hanoi was listed at VND37.57 million/tael and VND37.67 million/tael for bid and ask, respectively.

Compared with yesterday morning, local gold prices are up VND150,000-170,000 a tael, or 0.4% versus 1.5% rise in global gold to top $1517 an ounce.

Local media reported that Hanoi will investigate gold and dollar shops in the city from May 2, 2011 to fight illegal trades.

In Asia trade this morning, gold reached a record high underpinned by a weakened dollar after the U.S. Federal Reserve signaled no rush to reverse its accommodative monetary policy.

Spot gold matched the record high of $1,529.9, hit in the previous session, U.S. gold rose to a record high of $1,530.80 an ounce, and eased slightly to $1,529.60.

The dollar index, a measure of the greenback’s strength against a basket of currencies, declined to a three-year low following Fed chief Ben Bernanke’s remarks that the central bank would not scale back its support for the economic recovery any time soon.

“Gold has followed the misfortunes of the dollar,” said Darren Heathcote, head of trading at Investec Australia. “It looks very difficult to find a reason to sell gold right now, and technical we are targeting at $1,550.”

In local money market, the dong strengthened by VND5 to VND20,693 a dollar, the ceiling rate is at VND20,900. Banks offered dollar VND200-700 lower than the ceiling, negative daily trading band was first applied. Vietcombank, Vietnam’s biggest dollar trader, quoted dollar prices at VND 20,570 – 20,640 respectively for bids and ask, lower than midpoint price. – Stoxplus.com

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