Gold drops to under VND43.5 mln, may fall further

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Báo Tuổi Trẻ English - 39 month(s) ago 2 readings

Gold drops to under VND43.5 mln, may fall further

Gold continued to fall to below the VND43.5 million a tael mark at the closing yesterday, proving the effectiveness of the central bank’s package to stabilize the market.

gold Gold Bullion from the American Precious Metals Exchange (APMEX) is seen in this picture taken in New York, September 15, 2011. Photo: Reuters

At 5pm, Saigon Jewelry Co (SJC), the country’s largest gold trader, quoted its selling price at VND43.05 million, down by VND500,000 a tael compared with the opening. SJC bought at VND43.45 million a tael.

Sacombank Jewelry Co (SBJ) also reduced its selling price to VND43.44 million a tael and buying at VND43.06 million a tael.

SBJ is one of the five banks that are in an alliance with SJC to sell gold at a uniform price as part of the State Bank of Vietnam’s measure to tame domestic soaring prices and narrow down its gap with global prices.

Initiated on October 6, the price stabilization measure has successfully pulled domestic price to VND44.05 million a tael at the closing session, down by VND900,000 a tael compared with the opening.

Since the stabilization package was launched, price has dropped by VND1.75 million a tael.
Three other banks in the alliance are DongA Bank, Asia Commercial Bank, Techcombank and Eximbank.

While those in the alliance yesterday kept the selling price at some VND43.4 million a tael, other gold shops in Hanoi listed selling price at around VND43.8 million.

A mistake to buy gold now?

Although the central bank’s intervention has reduced the gap between domestic price and global price, investors were still on the buying trend in the past two days.

Nguyen Cong Tuong, SJC’s sales manager, said Friday sales were 12,000 taels while purchases only 400 taels.

Ton The Vinh Quyen, SBJ’s sales manager, said his unit sold 2,200 taels on Friday and bought only 550 taels.

Quyen said buying gold at this time would likely put investors at high risk.

He said with the central bank’s determination to stabilize the domestic market, gold prices would drop by as many as millions of dongs a tael in the coming time regardless of the fluctuation of the global rates.

“Hence, it’s risky to buy gold at this time.”

At yesterday closing, spot gold at London market rose to US$1,657.9 an ounce, up by $6.6 an ounce compared with Thursday closing at New York.

With this, the precious metal in Vietnam is pricier than global price by some VND1.9 million a tael at the official exchange rate of VND20,844 a dollar. But with the black market rate of VND21,000 a dollar, the gap is only VND850,000.

Last week, the gap scored an excessive VND4 million.

Black market dollars drop

After reaching the peak of VND21,650 a dollar on Wednesday, selling price of the greenback has been on decline during the past two days.

At yesterday closing, it dropped by VND100 compared with the opening, and by VND250 compared with Wednesday.

The greenback was sold at VND21,380 a dollar in Hanoi and VND21,400 a dollar in Ho Chi Minh City.

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