Feb 11: Vietnam gold, Dollar rise on exchange rate move

Local gold and dollar prices on February 11 rose after the State Bank of Vietnam devaluated its dong to VND20,693 per dollar from VND18,932 and narrowed the trading band to ±1% from previous ±3%, effective immediately on today, February 11.

At the close, gold prices soared up to VND200 to close shy of VND36 million a tael.

Sacombank-SBJ gold as listed at VND35.88million/tael and VND35.99 million/tael for bid and ask, respectively.

Bid and ask of Thang Long gold bullion, a product of Bao Tin Minh Chau were listed at VND35.89million/tael and VND35.94 million/tael for bid and ask, respectively.

SJC in Hanoi was listed at VND35.9 million/tael and VND35.93million/tael for bid and ask, respectively. Meanwhile, SJC in HCMC was listed at VND35.9million/tael and VND35.96milllion/tael for bid and ask, respectively.

In Euro trade this afternoon, gold erased some of early gains in directionless trade under pressure from a drop in ETF holdings to their lowest since late January, a firm U.S. dollar and a lacklustre physical market.

Spot gold added 79 cents to $1,363.69 an ounce, well below a lifetime high around $1,430 an ounce hit in December. U.S. gold futures for April rose $1.6 an ounce to $1,364.1 an ounce.

Premiums for gold bars were steady in Hong Kong and Singapore, with no signs of buying interest from China after the Lunar New Year celebration. Unrest in Egypt could underpin sentiment, but there was hardly any physical buying in Asia related to the deadly turmoil.

“There’s not much going on in terms of demand in the physical market. That’s why there are some stocks kept here. (People) try to sell them immediately,” said Dick Poon, manager of precious metals at Heraus in Hong Kong, referring to physical supply.

“The production side and manufacturing are not back to normal after the Chinese holiday. Maybe next week. I think gold is most likely to trade in the range of $1,350 to $1,370 right now.”

Investors could return to the market next week, but higher prices could keep demand in check. Gold was at around $1,340 an ounce before the Lunar New Year.

“There’s not much demand from India either. The price is either too high for them to buy or to low to cash in. I think they are doing business internally, and there’s no need to buy from overseas market,” said a dealer in Singapore.

“The premium for gold bar is still at $1.6, but it’s likely to drop next week. We are starting to see suppliers easing up their premiums.”

A bullish target of $1,388 per ounce has been re-established for spot gold based on an inverted head-and-shoulders pattern, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings slipped to 1,225.526 metric tones by Feb. 10, their lowest since late January, from 1,226.436 metric tones on Feb. 9.

Local dollar prices rose to as high as VND21,550 after the Central Bank move before easing to last offered at VND21,500 in the free market. Some local banks quoted dollar prices at the new ceiling of VND20,900.

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