Gold price gap falls on lower demand

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SaigonTimes English - 38 month(s) ago 7 readings

HCMC – A considerable decrease in demand has pushed down the differential between local and global gold prices from a staggering VND1 million to around VND300,000 per tael.

Gold price gap falls on lower demand

By Thanh Thuong - The Saigon Times Daily

HCMC – A considerable decrease in demand has pushed down the differential between local and global gold prices from a staggering VND1 million to around VND300,000 per tael.

The number of buyers at Saigon Jewelry Holding Co. (SJC) this week has dipped sharply compared to last week, said Nguyen Cong Tuong, the company’s deputy sales manager.

For instance, the daily selling and buying volume was 3,500 taels and 2,500 taels on the first two days of the week respectively, while the previous week recorded an average selling amount of around 10,000 taels per day, Tuong added. A tael equals to 1.2 troy ounces.

Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry Joint Stock Co. (PNJ), said the firm’s daily sales declined 20% from last week to about 2,000 taels per day.

Meanwhile, buying has surged since the end of last week, Cuc said, adding her company on Tuesday bought some 1,600 taels, much higher than the figure of hundreds of taels per day last week.

Besides, the bullion import of SJC nearly filled up the quota granted by the central bank in late August, and the rise in selling by the public led to an abundant supply on the market, Tuong explained.

As for PNJ, it has had no difficulty serving buyers since it used up the import quota, Cuc noted. Apart from the decline in buying, Cuc attributed the falling price differential to the stable exchange rate, with Vietcombank having kept a dollar selling price of VND20,834 since late August.

According to a deputy director of a large trading company, most businesses have already finished importing gold with around seven tons. He supposed that the domestic traders can no longer petition for more import quotas given the current narrow gap failing to cover the costs.

Bullion’s price in the international market has seen strong volatility this week. The New York market closed at US$1,900 per ounce, increasing by US$18 over the last week.

Whereas, the price in the Asian market continued soaring on Tuesday morning, even surpassing US$1,920 per ounce, but fell again on Tuesday afternoon, closing below US$1,900 per ounce as of 4 p.m.

At present, the local price’s volatility is not as strong as that of the outside world, with the opening price at SJC for selling being VND47.98 million per tael on Tuesday, barely up by VND100,000 compared to the previous day. The highest selling price was acknowledged at VND48.2 million per tael, but the spot price closed the day down at VND48 million per tael.

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