Gold trading stagnates following purity concerns

Gold trading has been slowed down in the local market because of recent concerns over the purity of gold bullion.

The stagnation has been fuelled by dealers on the defensive waiting for official information on the management of gold bars on the free market.

Vietnam has been considering eliminating gold bullion trading on the unofficial market in a bid to reduce trade deficit and stabilize its macro-economy.

News analyses have indicated that gold prices will continue rising as the yellow precious metal is now seen as a safe property against the backdrop of a worsening EU debt crisis.

SPDR Gold Trust, the world’s largest of its kind, Monday purchased 7.58 tonnes of gold, lifting its stock to 1,209.53 tonnes, the largest volume since May 5.

SPDR has stocked up on 18.19 tonnes in the last 2 trading sessions, much more than the total amount it had stockpiled in the earlier 6 trading sessions.

China was reported to have bought 200 tonnes of gold in the first quarter, up 55 percent over the last fourth quarter and more than 200 percent compared to the same period last year.

Meanwhile, it had purchased 240 tonnes in the entire year of 2010.

The country procured 93.5 tonnes in April alone, according to the World Gold Council.

The greenbacks will weaken for at least another two months, which acts as a stimulus to raise gold prices, experts believe.

Domestic gold prices crawled up to 37.55 million dong (US$1,816.82) per tael at the end of Tuesday while world prices hit $1,523 per ounce, a $12 hike from one day earlier.

1 tael = 1.21 troy ounces.

Posted by VBN on May 25 2011. 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