April 7: Vietnam gold hovers below VND37Million, Dong eases

Local gold on April 8 hovers around VND36.94million/tael though global gold rose to settle above $1,458 an ounce, an all-time high in New York last night. The dong eased VND5 per dollar at banks.

As of 1:39 p.m. Hanoi time, Sacombank-SBJ gold as listed at VND36.86million/tael and VND36.92million/tael for bid and ask, respectively.

Bid and ask of Thang Long gold bullion, a product of Bao Tn Minh Chau were listed at VND36.83million/tael and VND36.94million/tael for bid and ask, respectively.

SJC in Hanoi was listed at VND36.85million/tael and VND36.94million/tael for bid and ask, respectively, meanwhile, SJC in HCMC was listed at VND36.85million/tael and VND36.92milllion/tael for bid and ask, respectively.

In Asian trade this morning, gold ticked lower to hover below a record on Thursday ahead of an expected euro zone interest rate hike, while ETF holdings dropped to their lowest in almost a year as investors shifted some of their money into other markets.

Spot gold eased 61 cents to $1,456.39 an ounce, after striking a record of $1,461.91 on Wednesday as the U.S. dollar slipped to a 14-month low against the euro.

Gold is far below its all-time inflation-adjusted high, estimated at almost $2,500 an ounce set in 1980 as a result of heightened geopolitical pressure and hyper inflation.

“Moms and dads are moving out, out of gold and into the equities. But our expectations for gold moving higher has more to do with inflationary concerns, I think, particularly in China,” said Jonathan Barratt, managing director of Commodity Broking Services.

“Market is looking at not just oil, it’s looking at food and I think that’s important, particularly when corn reached a record high. Expectations are that foodstuff will continue to rise.”

The European Central Bank is poised to raise interest rates from a record low 1.0 percent on Thursday and more is likely to follow but, fearful of heaping more pain on the euro zone’s stragglers, it will give few clues about when the next move will come.

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell to 1,205.467 metric tons by April 6, their lowest level since May last year, from 1,212.745 metric tons on April 5.

U.S. gold futures for June barely moved at $1.457.7 an ounce. Gold’s volatility index dropped more than 2% on Wednesday, suggesting that the market was not expecting wild price movements in the future.

In local official forex market, the dong eased as the State Bank of Vietnam (SBV) weakened reference rate to VND20,713 per dollar, according to the central bank’s data. It was traded at VND20,915 and VND20,920 for bid and ask, respectively at Vietcombank. – Stoxplus.com

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