Gold fevers likely to hold on

The State Bank of Vietnam (SBV)’s license to import on gold on late October 7 did little to help ease the local gold and dollar prices and gold fevers likely return in the coming time, the local newswire Thanh Nien reported October 11.

The State Bank of Vietnam (SBV)’s license to import on gold on late October 7 did little to help ease the local gold and dollar prices and gold fevers likely return in the coming time, the local newswire Thanh Nien reported October 11.

Dollar prices in the free market were sold at VND19,860 – VND19,930 in early October, which are far higher than the cap of VND19,500 set for commercial banks. Therefore, local banks have charged some add-on fees to actually raise dollar price above the cap.

Vietnam’s gold export activities have halted since late September as local gold prices were higher than global ones, squeezing the dollar flows into the country, the newswire explained.

The investors’ expectation of a sustainable dollar price hike and mounting demand for the greenback to import gold are two main reasons leading to dollar rally, an analyst said.

The small quota of gold import given by the SBV is inadequate to ease the domestic gold fever as central bank allowed ten local gold-trading firms to import only 100kg-300kg tons of gold each within 3 working days

Apart from that, global gold prices are expected to extend its rising momentum to hit $1,400/ounce in the last quarter, spurring speculative demand for gold. Therefore, gold fevers are expected to return in the coming time and the flat quota to import gold by the SBV is only a temporary solution to cool down gold and dollar prices. – Stoxplus.com

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

Posted by VBN on Oct 12 2010. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry