Gold prices at the crossroads

Banking Academy of Vietnam Training Centre deputy chief Nguyen Trong Tai said domestic markets prices would continue to trend downward on the back of volatile world prices.

More stringent gold production and trading regulations due to Decree 24/2012/ND-CP effective from May 25 would make the sector less charming to speculators.

Phu Nhuan Jewelry Company (PNJ) deputy general director Nguyen Thi Cuc said its gold product sales volumes had halved from a year ago.

Deputy head Nguyen Cong Tuong at Saigon Jewelry Company’s gold bar trading department said a spike in prices was unlikely in the short term, but international economic experts expected prices to shoot up in the later months of the year as was the case in late 2008.

Global banking group Citigroup forecast gold prices might average $1,950 per ounce in 2012 and $1,745 per ounce in 2013 against $1,650 and $1,500 per ounce earlier predicted.

Citigroup economic analyst Jon H Bergtheil assumed global economic uncertainties, a weakening US dollar and concerns over inflation and degradation in US-based credit organisations and sovereign debt crisis in Europe have pushed up the demand for gold. Besides, the gold price could rise on the back of accelerating gold purchases by central banks worldwide or the decision on retaining low interest rate of US Federal Reserve.

Vietnam Gold Business Association general secretary Dinh Nho Bang, however, warned people to take a cautious approach to gold.

The price of gold in the domestic market continues its downward trend on the back of continuing economic vulnerabilities globally.

Saigon Jewelry Company, Vietnam’s biggest gold processer and trader, today collected the metal at VND42.650 million ($2,030) and sold at VND42.870 million ($2,041) per tael (1.2 ounces).

Domestically, gold fetched around VND1.1 million ($52) a tael, higher than global prices.