Gold advances on rising demand for wealth protector

Most gold shops bought the metal at VND36.25 million and sold at around VND36.35 million as of 9 am local time, an increase of VND250,000 a tael over the previous day.

Saigon Jewelry Company bought gold at VND36.27 million and sold at VND36.33 million as of 9:30 am local time.

At the same time Hanoi-based Phu Quy Jewelry purchased SJC-brand gold at VND36.27 million and sold at VND36.37 million.

Domestically, gold fetched VND400,000 a tael higher than global prices.

On free market, the US dollar exchange rate continued to emerge this morning. Dollars were bought at VND21,180 and sold at VND21,230, an increase of VND10 per dollar over the previous day. The greenback gained VND150 per dollar over last weekend.

Internationally, gold advanced as the US dollar weakened, bolstering the demand for the metal as a protector of investors’ wealth.

Gold for immediate delivery soared $8.7 an ounce to close at $1,395.5 an ounce on the Comex in New York.

In Asia, gold extended rising trend of the trading session in New York, sending the prices to hit $1,400 an ounce again after it failed to maintain this level last week. Spot gold rose nearly $7 an ounce over the closing price in New York to trade at $1,402 an ounce as of 9:45 am Vietnamese time.

Credit rating agency Moody’s Investors Service signaled that President Barack Obama’s agreement to extend tax cuts would likely increase the country’s budget deficit and the chance of a negative outlook for the nation’s credit rating.

The US dollar exchange rate against the euro dropped to $1.34 a euro in Tokyo this morning from $1.32 the previous day.

Besides, the US tax-cut policy may also strengthen inflation, boosting the precious metal’s appeal as a hedge against inflation.

Gold also climbed because China refrained from raising its benchmark interest rates last weekend as most analysts had forecast, although they said that inflation might urge the country to increase interest rates rapidly next year.

However, China’s inflation itself is one of most important factors that supported the gold price. The demand to buy gold to prevent the currency from depreciating strongly rose in the second-largest consumer market for gold.