Gold hits 15-week low

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Báo Tuổi Trẻ English - 30 month(s) ago 64 readings

Gold hits 15-week low

The local price of the precious metal hit a 15-week low as the world price plummeted to around $1,650 an ounce on Monday.

gold For illustration purposes only

As of 9:00am, the bid and ask price of the national gold brand, SCJ of Saigon Jewelry Co, was quoted at VND43.03 million a taell and VND43.23 million a tael respectively, down VND90,000-100,000 a tael compared to last Friday’s session.

SJC graphs on its website show that the price has hit its bottom this year.

The bid and ask prices of SJC bullion at the Hanoi-based Bao Tin Minh Chau Co were at VND43.13 million a tael and VND43.23 million a tael, down VND110,000 against last Saturday’s prices.

The price of Rong Vang Thang Long ( Thang Long Golden Dragon) bullion produced by Bao Tin Minh Chau Co saw a slighter fall of VND50,000 a tael to VND42.45 million a tael and VND42.75 million a tael for bid and ask prcies, respectively.

The non-SJC gold is VND680,000 a tael and VND480,000 a tael lower in pricethan SJC gold.

On the world market, spot gold was at $1,651.4 an ounce, $7.1 an ounce lower than last week's closing price, according to the Kitco trading floor. Before that, the gold price had even dropped to $1,648.4 an ounce before recovering.

With Vietcombank exchange rates and extra charges added, the world gold price is VND1.5 million per tael lower than the local price.

Non-SJC gold regains

While SJC gold dropped some VND300,000 a tael, non-SJC gold soared VND1 million per tael last week, closing the gap between the two kinds of gold after the release of the recent gold management decree.

With the recent rise, non-SJC gold was some VND400,000 per tael cheaper than that of SJC.

Last week, the Prime Minister issued Decree 24 on management of the gold market , which allowed non-SJC gold bars to be traded normally. Though the decree stated that the state is the exclusive producer of SJC gold bullion, psychological fear caused many people to rush and sell non-SJC gold.

As a result, the price of non-SJC gold, such as Bao Tin Minh Chau, dropped to VND2 million per tael below the SJC ones.

After that, Nguyen Quang Huy, director of the Foreign Exchange Management Department under the State Bank of Vietnam (SBV), said that "Decree No.24 does not discriminate between SJC gold and other non-SJC gold bars.”

As a result, the statement helped non-SJC gold prices accelerate rapidly, with a VND700,000 per tael rise in the last three days of last week.

Domestic gold prices dropped during the Saturday session following the trend of world market, but the decrease is much slower, resulting in a widening gap between world and local prices.

In Hanoi, SJC gold on sale at Bao Tin Minh Chau was traded at VND43.24 million per tael and VND43.34 million per tael for bid and ask prices respectively, down VND60,000 compared to Friday’s.

SJC gold price in Ho Chi Minh City fell to VND43.12 million per tael and VND43.32 million per tael for bid and ask respectively, down VND300,000 week on week.

The rally of non-SJC gold slowed down after several days of continually rising.

The Rong Vang Thang Long gold bullion of Bao Tin Minh Chau was quoted at VND42.6 million pera tael and VND42.9 million a tael for bid and ask respectively, down VND50,000 day on day.

On the world market, gold prices crashed during the Friday night session, negating the effort of the previous session as the dollar strengthened on rising worries about European debt.

Spot gold stood at $1,658.5 an ounce, down $16.8 compared to the previous session, while gold futures for June were down 1.21 percent to $1,660 an ounce.

This was the sharpest fall since April 4.

Overall, during the week, the gold price rose 1 percent as its role of a safe haven returned.

Expectation of a stimulus program in the U.S. reappeared after new jobs figures in March were overcastted, and the fact that China will likely ease monetary policies due to a 3-year low Q1 GDP growth, boosted optimism of gold investors for a fresh rally in the coming week.

The gap between the world and local gold price last week narrowed to VND1.3 million a tael for SJC gold and VND900,000 for non-SJC ones, down considerably from the VND1.8-2 million a tael gap of the previous week.

In a separate incident, according to the latest report of the World Gold Council (WGC) , gold prices in Vietnam were up 18 percent last year, while world gold rose only 11 percent. In Vietnam gold is increasingly popular, as people believe it is better to hold gold than money.

According to WGC, Vietnam owns more gold per capita than India or China, with an estimate of a total of 300-500 tons.

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