April 21: Vietnam gold extends rally for sixth day, Dong up vnd5

Local gold on April 21 extended its rally streak to a sixth day in a row as world gold price continued to rally, the dong rose VND5 again for a second straight day.

As of 8:30 Hanoi time, Sacombank-SBJ gold as listed at VND37.56million/tael and VND37.62million/tael for bid and ask, respectively, up VND120,000.

Bid and ask of Thang Long gold bullion, a product of Bao Tn Minh Chau were listed at VND37.53million/tael and VND37.65million/tael for bid and ask, respectively, up VND90,000.

SJC in Hanoi was listed at VND37.52million/tael and VND37.64million/tael for bid and ask, respectively, up VND80,000.

Though the local gold prices rose steadily in the past five days, they are estimated to be VND400,000/tael lower than global gold prices, as a result of the government bullion trade limitation. The converted global gold prices plus import fees and taxes are VND37.9 million – VND38 million a tael.

The gold trading was more active but profit taking pressure prevailed, local gold traders said.

In Asia trade this morning, spot gold rose to a record high of $1,507.15 an ounce, breaking record for a fifth consecutive session, buoyed by a weak dollar. U.S. gold futures also hit a record high, at $1,507.9 an ounce.

Market Insiders: weak U.S. dollar support gold rally

The $1,500 area was a target for many market watchers and now that it has been breached they are reviewing where the yellow metal’s price may go from here. Below are comments from several gold market participants:

Afshin Nabavi, head of trading at MKS Finance

“”For the time being, it looks like $1,505-$1,506 is small resistance. There seems to be some profit-taking around there this morning. Once we break $1,505-06, then $1,600, $1,700 or even $2,000 at this point in time doesn’t look too far-fetched.”

Daniel Pavilonis, senior market strategist, Lind-Waldock

“I think this thing will keep going higher. The dollar (index) is breaking down… If any kind of (deteriorating) situation happens here in the U.S., there is going to be flight to quality into the metals… We could see $2,000 gold by the end of the year.”

“We’re starting to see inflation now…I think more central banks are buying gold now…plus you have all those funds that are buy-side in gold.”

Charles Nedoss, senior market strategist, Olympus Futures

Still, he cautioned, the market could pause for a while around $1,500. “A lot of times, markets will stop at even numbers,” he says.

Sterling Smith, commodity trading adviser and market analyst with Country Hedging Inc.

“What’s driving the rally in gold is the pervasive weakness in the U.S. dollar… I see a move in the second quarter to $1,580-$1,620. We may find some profit-taking at the end of May or June as summer approaches. It won’t be a serious correction, just some weakness and a sideways move.

Jimmy Tintle, analyst at Transworld Futures

“That ($1500) was everyone’s main number. We didn’t blow through it. Today and tomorrow will be important to watch. We could see some correction, or we could just hang out here. I could see some profit taking going into a three-day weekend.

Mike Zarembski, senior commodities analyst, optionsXpress

“You might start to see some profit-taking around these levels. People might take some money (off the table), especially going into a holiday weekend, especially with Europe on an extended holiday. If we get another day or two rally here, if we were around $1,510 to $1,515, I could see a little bit of selling going into the weekend.”

In local official forex market, the dong gained VND5 against the dollar as the State Bank of Vietnam (SBV) raised reference rate to VND20,725 from VND20,728 per dollar.

Local media reported that it is now easier for the public to buy dollar from banks as the exchange rate breaks even between black and official markets. – Stoxplus.com

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