Gold exceeds VND42.2 mln as dollar nears two-month high

Jun 5th at 15:05

05-06-2012 15:05:40+07:00

The local gold price has exceeded VND42.2 million a tael as dollar prices continue to rise to the VND21,000 per dollar threshold.

The price of the precious metal has regained some VND110,000-120,000 a tael after inching down VND100,000 a tael on Monday, following the global trend.

The price touched the mark of VND42.2 million a tael last Saturday when world prices surged by around $66 an ounce to $1,626 an ounce for spot gold and $57.9 to $1,620 an ounce for gold futures for August delivery.

At 10:30 am in Hanoi, Bao Tin Minh Chau Co listed the price of Saigon Jewelry Co (SJC)-produced gold bullions at VND42.1 a tael and VND42.23 million a tael for bid and ask, respectively.

Meanwhile, Doji Group quoted the bid and ask SJC gold bullion prices at VND42.12 million a tael and VND42.22 million a tael.

In Ho Chi Minh City, the respective prices of gold bullion offered by SJC were VND42 million a tael and VND42.22 million a tael.

On the world market, the gold price has recovered to $1,620 an ounce as oil and equities gained ahead of emergency talks by the G7 leading industrialized powers, which will discuss the deepening problems in the euro zone that threaten to spur a global economic meltdown, according to Reuters.

Gold prices edged down last night due to profit taking activities of investors after the 4 percent increase late last week that broke the trend of trading in sync with riskier assets.

Concerns about the worsening European debt situation have made gold, German and US government bonds the safest haven for investors rushing to hoard.

The official exchange rate of Vietnam dong and US dollar at commercial banks increased by VND40 a dollar compared with yesterday, approaching the highest level in the last two months.

At Vietcombank, the greenback has been traded at VND20,920 a dollar and 20,990 a dollar for bid and ask respectively, figures considered as the benchmarks for the market.

The respective rates at BIDV, Eximbank, and VIB ranged from VND20,870-20,910 a dollar and VND20,980-21,000 a dollar.

The rates have been on the upward trend for five consecutive days, rising VND120 a dollar in total, the strongest gain in two months.

With the official exchange rate, plus taxes and fees involved, the domestic gold price is higher than the world price by VND900,000 a tael, narrowing the gap of over VND1-1.5 million a teal from May.

Not an ominous sign

A representative of Asia Commercial Bank (ACB) said the U.S. dollar price increase may be caused by strong purchases from banks to balance their forex reserves, from the state, or from exporters for debt repayment.

But the force is not strong enough to cause any worry about the stability of the forex rate, he told newswire Vnexpress.

Even though the average interbank exchange rates have been anchored at VND20,828 for four months, most commercial banks had to adjust prices last week.

However, the adjustment to increase or decrease the current rate by a few dozen dong is not uncommon in the bank's activities.

"The current exchange rate is nothing to be worried about because its fluctuations follow market rules," he said.

He also added there is nothing unusual happening to the sale and purchase of dollars in the ACB, as foreign currency liquidity of ACB has improved positively.

Nguyen Hoang Minh, deputy director of the HCMC branch of the State Bank of Vietnam (SBV), shared the same view, adding that the dollar price, as well as prices of goods and services, must fluctuate.

"We have been closely following the evolution of the dollar / dong forex rate daily, and have found nothing unusual as it remains under the allowed ceiling, at VND21,036 a dollar," Minh said.