Gold-dumping rumour sends prices up

Domestic gold prices skyrocketed yesterday to VND28.25 million (US$1,479) per tael, as global prices smashed their way to a new record of over US$1,245 an ounce on Wednesday and local traders rushed to cash in.

The precious metal soared in late morning trade on the London Bullion Market as investors sought shelter from the Eurozone debt crisis.

In HCM City, Sai Gon Jewelry Co (SJC) was selling gold at VND28.1-28.2 million (around $1,475) per tael, while SJC agents in Ha Noi were selling as high as VND28.25 million per tael.

Gold leaf at Sacombank was up by VND210,000 yesterday morning to VND28.14 million.

Bao Tin Minh Chau Jewelry Co was listing buy/sell prices at VND28.18- VND28.25 million, causing many investors to rush. A number of gold shops reported buying a large volume of gold from investors.

Some analysts were attributing the spike in domestic prices to a rumour that SJC would dump gold on the market as a price-control measure. However, a source from the State Bank of Viet Nam denied that SJC had been asked to take the action.

Ha Noi gold dealers agreed, saying that, if SJC sold in large quantities, it would then be forced to turn around and import a large volume of gold to meet subsequent demand, a move that would cause heavy losses across-the-board to dealers and traders. Meanwhile, the US dollar strenghthened slightly against the local currency yesterday following rumours that the central bank was preparing to further decontrol the exchange rate. The black market exchange rate climbed yesterday morning from VND19,070 to VND19,100 per dollar.

The upward trend on the street ran counter to the official rate, which remained stable at VND18,544. At commercial banks, a US dollar remained stable at around VND19,050.

Nguyen Hoang Minh of the HCM City banch of the State Bank of Viet Nam said that US dollar rates at commercial banks continued to reflect supply and demand at each bank.

Dollar liquidity remained strong, Minh said, and he denied any rumours that the State Bank was planning to loosen the dollar-dong trading band. — VNS

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