Feb 16: Vietnam gold, Dollar extend rally, trading active

Local gold prices on February 16 continued to surge as global prices extended gains for a second day in a row last night in the New York, local dollar inched up to VND21,850 this morning.

As of 14:00 Hanoi time, Sacombank-SBJ gold as listed at VND36.58 million/tael and VND36.64 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 VND36.6 million/tael and VND36.72 million/tael for bid and ask, respectively.

SJC in Hanoi was listed at VND36.62 million/tael and VND36.71million/tael for bid and ask, respectively. Meanwhile, SJC in HCMC was listed at VND36.62million/tael and VND36.69 milllion/tael for bid and ask, respectively.

It is estimated that local gold prices is about $30 higher than the global ones, as gold traders tried to keep the prices higher when retail physical demand is still high.

Local media reported that trading activities were heavier, some gold-shops refuted to sell dollar in bulk as requested on today trade.

In Euro trade this afternoon, spot gold held steady after two consecutive sessions of gains, as investors stood on sidelines of a market with no clear trend for the short term, and technical resistance is seen around $1,375.

Spot gold was little changed at $1,373.65 an ounce. It hit a four-week high of $1,376.50 on Tuesday. U.S. gold futures edged up 10 cents to $1,374.20.

Rising price pressure has stoked fears that central banks might turn increasingly hawkish on interest rates, which could hurt sentiment in gold.

“We are seeing inflation rise globally,” said Darren Heathcote, head of trading at Investec Australia, “The bullish trend is intact, although we’ll see periods of weakness.”

Technical analysis showed that spot gold is expected to rise into the $1,385-$1,390 range, as an uptrend has been established while the contract climbs within a rising channel, said Reuters market analyst Wang Tao.

If gold could stand firmly above the key resistance level around $1,375, it could move towards $1,400, traders said.

“It’s been quite a bounce, but there is some technical resistance right around here and we’ve seen a bit selling to take profit,” said a Singapore-based trader.

“I do think the story is intact. Just right now, it’s not particularly compelling.”

Holdings in the SPDR Gold Trust the world’s largest gold-backed exchange-traded fund, slipped to 1,224.008 metric tones by Feb 15, its lowest since May last year.

The unfolding political drama in Middle East nations continued to attract attention of global investors. The situation, if deteriorated, could drive investors to seek safe-haven in gold.

But some market players said the influence on gold market might be insignificant.

In local forex market, the State Bank of Vietnam (SBV) adjusted its reference rate’s midpoint to VND20,698 from VND20,703 yesterday. But in local black market, USD continued to rally to VND21,680 and VND21,850 for bids and asks respectively. – Stoxplus.com

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