Sep 29: Vietnam gold turns tail, Dollars up

Local gold prices on September 30 fell sharply by up to VND150,000 a tael after hitting the record high of VND31.35million/tael yesterday, dollar prices heated up on black market to VND19,710.

The local gold dealers have adjusted listed gold prices for several times this morning and still keep spread between bids and asks as big as VND80,000 a tael.

On Thursday,Ho Chi Minh’s SJC bullion at 9h 05 a.m. was listed at VND31.14million/tael and VND31.18million/tael for bid and ask, respectively, falling VND170,000 and VND140,000 from yesterday’s peak.

Sacombank-SBJ bullion in Ho Chi Minh was listed at VND31.17million/tael and VND31.23million/tael for bid and ask, respectively, down VND10,000/tael-VND50,000/tael from yesterday close.

Local trading remains sluggish this morning as investors stayed on the sidelines on high gold prices.

In Asia trade this morning, gold ticked lower but held within sight of a record hit in the previous session, with prospects for a weaker dollar in focus on possible further U.S. monetary easing.

Spot gold eased $1.30 to $1,307.50 an ounce after hitting a lifetime high around $1,313 an ounce on Wednesday — its 10th record high in the past 12 trading days. Gold has gained as much as 19.8 % this year.

U.S. gold futures for December delivery fell $1.3 an ounce to $1,309.0 an ounce, not far from Wednesday’s record at $1,314.80.

Sales of gold scrap persisted in Southeast Asia but volume was small, while Chinese consumers bought some quantity of physical silver despite prices at near 30-year high. Palladium firmed after rallying to its strongest since early 2008 on Wednesday, while platinum was below a four-month high.

“Scrap from Indonesia and Thailand continues to enter the market but the quantity is not fantastic. I guess because clients are afraid gold will move higher again,” said a physical dealer in Singapore. “The Chinese bought some silver this morning.”

“The market may have consolidation within this $10 range, but I would expect it to sustain the rally because the momentum has not changed yet,” said a bullion dealer at Bank of China in Hong Kong.

“It’s not easy to predict the resistance level, but we will try to hit another record high in the next few days.”

“Essentially, it feels like we need to consolidate a bit. However, there are a lot of people thinking that, but very few are willing to short the market,” said Credit Suisse analyst Tom Kendall.

“It’s quite possible that if there are any further upsets in either the currency markets or the rates markets… we could get another leg higher and then we’d be looking at the next upside target at $1,330,” he said.

“Gold is flying because of concerns over a weakening dollar, and the prospect of quantitative easing,” said David Wilson, an analyst at Societe Generale. “Our internal house view is for a slight softening of the dollar over the next 3-6 months.”

Buying in India, the world’s biggest gold consumer, rose on Wednesday despite the hike in spot prices, as strength in the rupee helped shield local buyers from the rise.

Investment interest in gold was also firm, with holdings of the world’s largest gold-backed exchange-traded fund, New York’s SPDR Gold Trust, climbing just over five tons on Tuesday.

In the local forex market, dollar prices edged up at both unofficial market and official market. Dollar prices at gold shops were quoted at VND19,650 and VND19,710 for bid and ask, respectively. Meanwhile, Vietcombank’s dollar bid and ask were at VND19,49 and VND19,500.

In global forex market, the dollar struggled near the week’s lows against the yen on Thursday and held near a five-month low on the euro, hit by expectations of more Federal Reserve easing.

The Federal Reserve has inched closer to fresh steps to aid the world’s largest economy, but Fed officials disagreed on Wednesday on what should prompt more support and what impact more asset purchases could have. – Stoxplus.com

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