Gold drops after approaching VND44 million

>> 2.1 tons of gold to be imported for jewelry making

Sacombank Jewelry Company bought gold at VND43.45 million and sold at VND43.75 million as of 9:55am Vietnamese time.

Saigon Jewelry Company, the biggest gold processor and trader in Vietnam, collected gold at VND43.4 million and sold at VND43.7 million as of 10:31am Vietnamese time.

Hanoi-based Phu Quy Jewelry Company purchased SJC-brand gold at VND43.47 million and sold at VND43.75 million as of 11:44am Vietnamese time.

Meanwhile, Bao Tin Minh Chau Jewelry Company quoted the price at VND42.4 million for buying, and VND42.7 million for selling at 11:50am Vietnamese time.

Earlier, gold surged to VND43.95 million a tael, the highest level since January 4 this year. However, the metal edged down as global price fell sharply.

Domestic gold fetched around VND2 million, higher than global price.

Trading on bullion market became slow ahead of Tet holiday season. Saigon Jewelry Company bought around 800 tael of gold, and sold nearly 1,000 tael yesterday, while trading volume was just slightly more than 900 tael at Sacombank Jewelry Company.

Gold traders expected that bullion market will remain subdued until lunar year end.

On free market, the dollar exchange rate rose slightly this morning. In Hanoi, dollars were bought at VND21,090 per dollar, and sold at VND21,120 per dollar, an increase of VND10 per dollar over the previous day.

Internationally, gold rose as concerns over the European sovereign-debt crisis eased after bond auctions went smoothly in Italy and Spain, encouraging investors to put their money in riskier assets.

However, after upbeat data in recent weeks, latest US data showed that retail sales rose at the weakest pace in seven months in December and jobless benefits moved higher last week, suggesting the economic recovery is still shaky despite a recent pick-up in growth.

Gold for immediate delivery gained as much as $5.6 an ounce to close at $1,649.6 an ounce on the Comex in New York. Earlier, the metal jumped to $1,663 an ounce.

In Asia, spot gold dropped $10.3 an ounce to trade at $1,639.3 an ounce at 10:30 am Vietnamese time.

The euro exchange rate against the US dollar rose to above $1.28 a euro in Tokyo this morning.

Today, investors will pay attention to another bond auction in Italy.