Gold prices rise for 3rd week running

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Sai Gon Jewellery Holdings (SJC), Phu Nhuan Jewellery, Agribank Jewellery, Bao Tin Minh Chau, and Sacombank Jewellery yesterday all reported gold prices up by VND100,000 over last Friday; prices now reach VND37.90-38.04 million per tael. One tael equals to 1.2 ounces.

"Even when the price gets very high, people still want to buy gold as a safe asset," said Tran Ngoc Minh Thu, SJC's head of business division.

The VND38 million price was seen as a sign of resistance of the domestic market during the past month.

"In very short term, domestic prices may stay right on this level," Nguyen Huu Dang, a senior business official of Agribank Jewellery Corp (AJC) told Viet Nam News. "However, it is difficult to tell anything for sure in this context."

Tran Quoc Quynh, senior official of the Viet Nam Gold Traders Association added that whether gold price would remain at this level or not depended on global price changes.

Global gold strengthened yesterday, extending gains made in the previous session, as a disappointing US jobs data fuelled fears of a slowdown in recovery of the world's biggest economy and a softer dollar lent support. Spot gold edged up 0.3 per cent to $1,545.75 an ounce, building on three consecutive weeks of gains.

"Moreover, the current domestic forex market does not support gold price," Dang said. "If the State maintains the current US dollar price, domestic gold will be in line with global price."

He noted that when the dollar price was strengthened by one unit, domestic gold price would be raised by two and a half units.

Yesterday, commercial banks quoted US dollar at VND20,530-20,610 which was unchanged against last Friday.

According to a World Gold Council report released last month, Viet Nam's gold consumption increased by 2 per cent, reaching 19.2 tonnes during the first quarter of 2011. It was valued at US $878 million, a 28 per cent increase compared to the same period last year.

However, the gold bullion sales were reported to slip by 30 per cent in the last two months due to the appearance of impure gold alloys (capable of cheating most purity testing equipment as well as skilled goldsmiths).