March 1: Vietnam gold, Dollar prices fall on policy move

Local gold prices on March 1 bucked global trend, trading down almost VND240,000 a tael on falling domestic dollar prices and government policy to tighten control on gold trading.

As of 17:00 Hanoi time, Sacombank-SBJ gold as listed at VND37.31 million/tael and VND37.41 million/tael for bid and ask, respectively, down VND210,000 from that of yesterday.

Bid and ask of Thang Long gold bullion, a product of Bao Tin Minh Chau were listed at VND37.28 million/tael and VND37.4 million/tael for bid and ask, respectively, down VND240,000 from yesterday.

SJC in Hanoi was listed at VND37.3 million/tael and VND37.4 million/tael for bid and ask, respectively. Meanwhile, SJC in HCMC was listed at VND37.3million/tael and VND37.38 milllion/tael for bid and ask, respectively, down VND210,000.

In Euro trade this afternoon, spot gold steadied around $1,410, holdings in the biggest gold-backed exchange-traded fund fell to the lowest level in more than nine months.

Spot gold was nearly flat at $1,411 an ounce. It had been moving in a narrow range of less then $4.The most active U.S. gold futures contract edged up 0.1 percent at $1,411.90.

“There has been some scrap selling and liquidation above $1,405,” said Peter Fung, head of dealing department at Wing Fung Precious Metals in Hong Kong.

“We’ll probably see a price range between $1,405 and $1,415.”

But even as the political turmoil in the Middle East and North Africa continued to support safe-haven demand, improved economic prospects could weigh on gold prices, traders said.

Gold prices could drop 20 percent later this year and in 2012 as the global economy picks up, as speculators exit the market, said the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

Holdings in the SPDR Gold Trust dipped to the lowest since mid-May last year in a sign that investors may be switching to stocks and other assets, a dealer said.

“The money from gold ETF may have gone to the stock market, which has outperformed gold recently,” said a Hong Kong-based dealer.

In local money market, dollars are quoted at VND21,750 –VND 21,800 for bids and ask respectively. The dong has been steadily gained since Feb 24 after the Prime Minister said at an online meeting that Vietnam will require state-own firms to sell dollars to banks.

Vietnam is getting it tough in an effort to stabilize forex market and control inflation. – Stoxplus.com

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