Aug 19: Vietnam gold jumps $50/tael to all time high, dollar bid up vnd30

Vietnam gold opened up sharply by $50/Tael this morning following suit of global market surge last night, banks raised dollar bids as a result.

As of 10:30 Hanoi time, Sacombank-SBJ gold was listed at VND46.46 million/tael and VND46.74 million/tael for bid and ask, respectively, rising over VND1 million ($50) a tael.

SJC in Hanoi was listed at VND46.55 million/tael and VND46.72 million/tael for bid and ask, respectively while SJC in the free market was quoted at VND44.5 million-VND45.8 million a tael for bid and ask respectively, up from VND1.1 -1.3 million a tael.

Of note, traders continued to widen the gap between bid and ask by VND300,000 to minimize risks amid gold frenzy.

Global markets:

Gold rose for a fourth day to settle at $1,822 as slumping global equities markets and weak U.S. economic reports sent investors to gold as a store of wealth.
Spot gold was up 1.9 % at $1,822.30 an ounce. It hit an all-time-high record of $1,825.99 earlier in the day.

US gold future, for December delivery, rose $28.2 to settle at $1,822 a troy ounce. It briefly hit a record $1,829.70 before pulling back.

Futures gold remains off the inflation-adjusted peak $2,400 struck in 1980.

Market Watchers:

“These problems in Europe and the U.S. aren’t going to go away any time soon,” Reuters quoted Bill O’Neill, a principal with Logic Advisors, as saying. “It’s making gold and Treasurys the favorite investment vehicles.”

“I’m one of those people who think gold is going to $2,000 and it’s getting there. The underlying reasons don’t change, there is a lack of confidence in everything else.” said ANZ head of metal sales Peter Hillyard.

ETF Performance:
” Demand for gold has been fairly evident through increases in holdings of the metal in exchange-traded funds (ETF) and rising open interest in U.S. gold futures , building on a decline in the second quarter of the year.

Investment in ETFs fell by more than 80 percent on the same quarter last year, although inflows this year are up by a net 6 percent, with most of that investment materializing in the last month, according to ETF data monitored by Reuters.

Demand Picks Up

The bull market in bullion, which began in late 2008, turned 1,008 days old on Thursday, making it the fourth longest rally for gold since 1975, according to Bespoke Investment Group.

Despite demand for gold falling to 17% in the second quarter compared to the same period in 2010, the World Gold Council says that full-year demand will increase because of a rush to safe haven assets as market volatility has ramped up.

” the external environment has turned increasingly fertile for gold,” said Barclays Capital in a research note.

In other fundamental news, Venezuelan President Hugo Chavez said the country will nationalize its gold industry and is moving its international reserves out of Western countries.

India and China, traditionally markets with a high consumption for gold jewelry accounted for 55 percent of demand and 52 percent of total bar and coin investment.

“Other demand drivers are the central banks this year, an unbelievable number, 69 tons in this quarter of purchasing when in the past they have sold 450 tons a year for the past twenty years – which is a 500 ton swing in the demand side just from central banks in the last 18 months,” Marcus Grubb, managing director at the World Gold Council, told CNBC, Thursday.

“Gold has a new class of investor,” said Steve Grasso, director of institutional sales trading at Stuart Frankel & Co. “The people buying gold this time around are buying it to hold it long term for their kids, for their retirement and not just a market timing trade. Coming out of the housing implosion and Eurozone stress, there is a real perception, right or wrong, that gold is the only investment that’s not built on sand.”
A global currency crisis plays right into hands of the only currency that has stood the test of time: gold.

SPDR Gold Trust Holdings Rises 0.7%

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust edged up by 14.85 tons or 1.17% from a day earlier to 1,286.83 metric tons by Aug. 18

SPDR’s holdings’ record-high was 1,320.436 tons on June 29 last year.

Dollar prices

Vietnam’s central bank set the U.S. dollar’s exchange rate at VND20,618, unchanged for 9 days.

Commercial banks raised dollar bid as much as VND30 today while they kept offer at the ceiling VND20,824. – Stoxplus.com

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