Gold hits 2-month high on US presidential election’s developments
Gold hits 2-month high on US presidential election’s developments
The local gold price has increased VND550,000 ($26.4) a tael day-on-day following the global trend with a weakening US dollar given the outcome of today’s US presidential election.
The price has also hit a 2-month high.
As of 10:00 am, the benchmark price of Saigon Jewelry Co (SJC) gold bullion was quoted at VND46.65 million a tael and VND46.85 million a tael for bid and ask, respectively.
Meanwhile, the respective prices offered by the Hanoi-based DOJI group rose by VND420,000 a tael and VND570,000 a tael for bid and ask to meet SJC official prices.
On the world market, as of 11:18 am, spot gold prices tracked by Kitco.com stood at $1,725.7 an ounce, up $10 an ounce from the early hours of this morning. Compared to the previous closing price, the price of spot gold rose $40 an ounce.
With the official exchange rate of Vietcombank, the local gold price was VND3.4 million a tael higher than its world counterpart. The price differentiation rose to VND4 million a tael last week.
On the Comex floor, gold future for December delivery rose $8.2 an ounce compared to the closing price yesterday to $ 1,723.2 an ounce.
Gold prices rebounded when the final result of the 2012 Presidential Election showed that Barack Obama won.
Gold prices rose 2 percent last night following strong purchases from investors as they forecast that President Obama would be reelected. Obama’s win means there will be further easing policies in the near future, as he did in his first term.
The spot gold price stood at $ 1,616.8 an ounce while gold future is $ 1,615 an ounce.
On the Asian market, gold prices continued to fluctuate sharply while the whole world watched the election results in the United States.
The price even dropped sharply after Mitt Romney took the lead, but then reversed under the new development. At that time, spot gold was at $ 1,720 an ounce.
In a recent daily report on precious metals, UBS said an Obama victory would be the best support for gold prices following the president’s history of monetary and fiscal policies.
"In the case of Obama's re-election, the price of gold can recover to $ 1,725 an ounce, equivalent to the time before the U.S. employment report released in October," UBS said.
UBS said if Mr. Romney were to win, the gold price could decrease to $1,647 an ounce, equivalent to that at the end of this August, and prospecting for further reduction.
According to UBS, Obama's victory may take time to find solutions for the "fiscal cliff" and the U.S. debt ceiling. Risks arising from the political deadlock in the negotiations could support gold prices.
Moreover, Mr. Obama supported the loose monetary policy of the U.S. Federal Reserve (Fed) as well as factors that increase the gold price prospects.
HSBC's experts also stated that if Obama is re-elected, the interest rate may be adjusted lower – a factor that may support the gold price. By contrast, Mr. Romney intended to raise interest rates if he won, potentially leading to pressure to reduce gold prices.
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