Feb 9: Vietnam gold flirts VND36Mln/tael, Dollar down

Local gold prices on February 9 rose slightly to hover around VND36 million/tael as global gold rose 12$/ounce last night in New York. However, local dollar prices fell to VND21,300 in the free market.

The local gold prices soared almost VND100,000 to top VND36 million a tael early this morning but the rally lost steam as world gold prices fell in Asia trade.

At 1:40 p.m. Hanoi time, Sacombank-SBJ gold as listed at VND35.88million/tael and VND35.94 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 VND35.9million/tael and VND36 million/tael for bid and ask, respectively.

SJC in Hanoi was listed at VND35.87 million/tael and VND35.95million/tael for bid and ask, respectively. Meanwhile, SJC in HCMC was listed at VND35.87million/tael and VND35.93milllion/tael for bid and ask, respectively.

In Asian trade this morning, gold slipped as investors and other physical buyers in Asia hugged the sidelines following China’s second interest rate increase in just over six weeks.

But gold’s ability to break above the 100-day moving average raised the prospect of more gains in coming days, Reuters analyst said.

Spot gold may rebound further to $1,384 an ounce, based on its wave pattern and a Fibonacci projection analysis, said Wang Tao, a Reuters market analyst for commodities and energy technical.

Spot gold fell $1.35 to $1,362.24 an ounce. It had risen as high as $1,367.83 on Tuesday, its strongest since late January. U.S. gold futures for April hardly changed at $1,363.2 an ounce.

“I think the price is on the higher end after the rebound. That’s why we don’t see much activity. We have to see if China is going to come back and buy,” said a dealer in Hong Kong.

“I think we could look for further gains in gold on follow-through strength,” said Ong Yi Ling, investment analyst at Phillip Futures in Singapore. “Investors were already expecting that China would raise interest rates sometimes during this Lunar New Year holiday.”

China raised interest rates on Tuesday as it intensified a battle against stubbornly high inflation that threatens to unsettle global markets.

The timing was a surprise, coming on the final day of the Lunar New Year holiday, but investors have long expected more monetary tightening as Beijing struggles to rein in price pressures and ward off a property bubble in an economy that grew at a double-digit pace last year.

In theory, a tightening in China could put pressure on demand for industrial metals and gold, but dealers said the bullion market was still digesting the news.

“It looks like ETF holdings continue to fall. We have to see if people are shifting to stock market because the economy is recovering. The stock market is more attractive than gold.”

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings slipped 1,228.560 metric tons by Feb. 8 from 1,228.864 metric tons on Feb. 4.

In local money market, dollar prices fell to VND21,300-VND21,350 for bids and asks respectively in the free market while the trading was sluggish. – Stoxplus.com

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