Gold price cools down after reaching VND47 mln threshold
Gold price cools down after reaching VND47 mln threshold
The local gold price has cooled to below VND46.85 million a tael after surpassing VND47 million a tael early Monday morning.
As of 10:30 am, the bid and ask prices of gold bullion produced by Saigon Jewelry Co (SJC), Vietnam’s biggest gold refiner and trader with over 90 percent of local market share, were at VND46.48 million a tael and VND46.83 million a tael.
The same price tags for SJC gold were applied at gold shops under the Hanoi-based DOJI chain, while the bid price of gold bullion manufactured by Phu Nhuan Jewelry Co was some VND100,000 lower than that of SJC.
Though recovering slightly after the closing price last week, at VND46.95 million a tael, the price of gold bullion manufactured by Saigon Jewelry Co (SJC) is still VND400,000 a tael lower than its 12-month high of at VND47.4 million a tael, which was set last Friday afternoon.
The SJC gold bullion peaked at VND49 million a tael in late August last year. The price then slipped downwards following the global trend.
World prices continued to go up Monday morning, hovering around $1,774.60 an ounce, $4.10 an ounce higher than last week’s closing price, the highest level in almost seven months. The world market has experienced four consecutive weekly gains, with prices sometimes jumping above $ 1,777, the highest since late February.
Gold usually benefits each time the world’s central banks decide to pump money into their economies because it is seen as a safe haven against inflation. The central banks of the US and the EU have recently announced that they will loosen their monetary policies by printing more money.
However, experts believe that the global economy still needs to add new money to recover.
The greenback is under pressure after the statement of the US Federal Reserve (the Fed) on future actions late last week, including a third round of quantitative easing (QE3) and the extension of a near-zero interest rate until 2015.
Within the QE3 program, the Fed will pump some $40 billion into the US economy each month until the jobs market shows sustained improvement.
After the announcement, the index measuring the dollar’s strength was near its lowest point in seven months against a basket of currencies.
In addition, the Fed’s QE3 launch has pushed the prices of global commodities, including gold and oil, up sharply.
Rush to sell
On late Friday afternoon, as the local gold price reached its 12-month high, local residents rushed to sell their gold bullion for profits, according to newswire Vnexpress.
The gold trading atmosphere in Hanoi became very active after prices jumped to VND47.4 million, a rare movement on the market.
At Bao Tin Minh Chau shop on Tran Nhan Tong Street, a growing number of gold sellers left the store's parking areas overloaded. Security forces there had to reject a number of sellers due to parking limitations.
Similarly, the parking lots of Phu Quy Gold and Silver store on the opposite side of the street had almost no space left, causing a serious traffic jam on the street.
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| Local people in Hanoi rushed to gold shops on Tran Nhan Tong Street to sell their gold bullion on Friday afternoon. Photo courtesy of Vnexpress. |
Bao Tin Minh Chau shops refused to buy SJC gold bullion as it had to prioritize its own gold bullion, the Thang Long gold bullions.
But as the number of sellers was so large, the stores ran out of cash to pay. As a result, the company had to issue written appointments for money repayment later on that day.
A DOJI representative said that by Friday mid-afternoon, the total volume of transactions reached 2,500 taels, of which 60 percent was the gold it bought from local customers.
But in Ho Chi Minh City, SJC bought 4,000 taels from local customers, equal to the amount of the sales, said Nguyen Cong Tuong, deputy head of the SJC sales department.
Similarly, PNJ purchased a total of 2,500 taels, more than double the number sold, which stood at1,200 taels.
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