Gold exceeds VND46 mln, at 2-month high

Though many big local gold traders, including Saigon Jewelry Co (SJC), Phu Nhuan Jewelry Co (PNJ) and Sacombank Jewelry Co (SBJ), have yet resumed their operations due to the Lunar New Year holiday (Tet) break, many retail shops in Hanoi and Ho Chi Minh City have raised the price of SJC gold bullion to VND46 million a tael.

The gap between the bid and ask prices has been widen to some VND700,000-1 million a tael due to uncertainty in the future price including world price and that which will be officially listed by SJC on Monday.

The bid and ask prices of SJC gold bullion at Hanoi-based Bao Tin Minh Chau and DOJI Co were VND45.5/VND46 million a tael and VND45.65/VND45.95 million a tael, up VND1 million and VND1.1 million week on week respectively.

The price of SJC gold bullion has rallied for the 4th week in a row this year with a 7.8 per cent rise, equivalent to VND3.3 million a tael.

The price hike, started since January 23 with a 2.2 per cent rise -- about VND1 million -- to VND45 million a tael, closely pursued international trend of which the spot gold has shot up to around $1,737.3 an ounce on the last trading session of this week.

COMEX gold futures, per the February 2012 contract, have finished higher 4.1 per cent – around $68.2 an ounce – to $1,732 an ounce.

World gold price increases under the influence of unfavorable factors such as the lower-than-expected quarterly GDP growth of U.S. in Q4, and the concerns about rising inflation in the U.S. and the unsettled European debt crisis.

Gold prices rose on Friday, on track for their biggest three-day rally since late October, after a report showing disappointing U.S. economic growth boosted the metal's safe-haven appeal, according to Reuters.

Gold's gains extended a rally ignited on Wednesday when the Federal Reserve said it would likely keep interest rates near zero until at least late 2014, said Reuters.

Gold also got a boost from reports that the world's biggest hedge fund, Bridgewater Associates, was bullish on the precious metal as a hedge against inflation as governments print more money to reduce debt, Reuters reported.

Besides, the news that central banks around the world bought 450 tons of gold in 2011, the highest volumes in nearly 50 years, has also promoted the purchase of investors. Last week, the world largest gold fund SPDR Gold Trust posted a net-buying of over 15.4 tonnes of gold.

Three other funds, including ETF Securities, Deutsche Bank and Swiss & Global, have also bought a total of 2.4 tonnes of gold. In particular, the purchase of Swiss & Global funds accounted for 66.67 per cent, or 1.6 tonnes of gold.

The survey of 25 people including fund managers, gold businesses, and technical analysts for the next week conducted by Kitco.com has showed that there were 19 people believe that gold would continue its rising momentum, while six people thought that gold would fall.

Gold to be in volatile in 2012: local experts

Truong Van Phuoc, Eximbank's General Director, told Phap Luat newspaper that the gold market would still be volatile in 2012 since the world still in the stage of overcoming the crisis, especially the debt crisis, and the U.S. is preparing for its presidential election.

Phuoc said as most predictions are that the gold price will continue to rise, local gold business must be very careful in the short-term or long-term.

Because gold prices have risen very high amid the global economic crisis, if world economic recovery takes place within this year, the ability for the price of the precious metal to reverse is very high.

In short-term, gold prices may rise, but in long-term it may not increase much, or even going down.

Tran Thanh Hai, general director of Gold Business and Investment of Vietnam (VGB) Joint Stock Co, said in 2012 that gold investment is still profitable channels. Domestic gold prices this year will largely depend on world factors.

This year the gold market is still volatile, gold could rise above $2,000 an ounce. However, investors must be careful, if they buy gold on borrowing, the risk of capital loss is very high, he aa.

Nguyen Cong Tuong, deputy head of SJC, said gold is like to rise in the long-term because the current supply cannot meet up with demand, besides the prices of gold also suffer from many different causes.

In 2011, gold prices have risen 28-31 per cent, and gold has repeatedly set up new record after one another in recent years, he said.