Gold price, forex rate strongly fluctuate

Gold was bought at VND44.95 million and sold at VND45.25 million a tael by Saigon Jewelry Holding Company (SJC) Monday afternoon, increasing some VND100,000 a tael against the morning but shrinking VND500,000 a tael from February 8.

The price fall is not in line with global prices. Gold prices on global markets have gone down over $50 an ounce in the past ten days to stand at $1,610 an ounce late last week. And trading prices on the European market inched up to $1,616 an ounce Monday afternoon, causing the difference between global and local price gap to widen to over VND4 million a tael.

Nguyen Cong Tuong, deputy sales manager of SJC, reported that locals rushed to buy the precious metal from his firm Monday, with many purchasing only a few taels for good luck. There were not many investors joining trading despite the gold price fall and the number of gold sellers was small, he added.

SJC only traded some hundreds of taels of gold, with most of the bullion sold out. Local gold prices didn’t go down considerably which is ascribable to the strong demand.

Relating to temporary export of gold bars and re-import of solid gold, Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s HCMC Branch, announced on February 8 that DongA Bank had completed re-importing about 100 kilos of solid gold. Other lenders like Techcombank and Sacombank will take turns converting gold bars into solid gold to have them processed into SJC gold bars in the near future, Minh said.

The movement hasn’t left considerable impact on consumer psychology in the context that local residents still consider gold buying as a way to wish for good luck at Tet. But Minh believed that weaker gold demand from local banks will help narrow down the gap of global and local prices in the long run.

The U.S. dollar price has strongly increased against Vietnam dong in the unofficial market since the sixth day of the first lunar month or last Friday, staying at more than VND21,200 at certain times. But it slipped to around VND21,080 Monday.

According to a shop owner at Ben Thanh Market, the greenback’s surging price has been fueled by rising demand for foreign currencies among local travelers while supply is limited. “The price of U.S. dollars might drop back after demand cools down and local banks resume operation,” the owner forecasts.

In the meantime, the inter-bank Vietnam dong/U.S. dollar exchange rate still remains unchanged, at VND20,828 and the selling price of the dollar still hovers around VND20,880 at lenders with no change recorded compared to pre-Tet periods.

The remittance volume sent home last year was lower than the preceding year’s volume. An official of the State Bank of Vietnam predicts the 2013 remittance at over $8 billion instead of the $10 billion as earlier estimated, which is lower than the $9 billion in 2011.

The Government reports on its web portal chinhphu.vn that the remittance volume still reached more than $10 billion in 2012, taking Vietnam to seventh position among the list of countries receiving the highest remittances in the world.

Minister of Foreign Affairs Pham Binh Minh said that remittance accounts for 60pct to 70pct of the total foreign capital that has flowed into the country since 1991. He noted that the amount has effectively contributed to developing the national economy, stabilizing the exchange rate and enriching foreign reserves.