Gold prices sink in the market

Gold prices slump in the local market on October 20 from last week's rate. - Photo tienphong.vn

The Sai Gon Jewellery Joint Stock Company sold a tael of gold from the State-owned gold brand SJC for VND33.97 million ($1,519).

Doji Gold and Gems Group reduced the selling price for a tael of gold from VND34.02 million ($1,522) to VND33.94 million ($1,518) while Phu Nhuan Jewelry Company (PNJ) sold one tael of gold for VNS33.92 million ($1,517).

Bao Tin Minh Chau Gold and Jewellery Company listed their selling rate for one tael of gold at VND33.92 ($1,517), recording a buying/selling ratio of 60/40 within the day for the valuable metal.

Most of the gold and jewelry companies thought that the local prices of gold were influenced by lower global prices.

According to international media, gold struggled after three days of losses on Tuesday, hurt by a stronger dollar and fears the Federal Reserve could still raise U.S. interest rates this year.

On the global gold trading website Kitco.com, the price for one ounce of gold was $1,173.20 ($1,413 per tael).

Thus, the local price for each tael of gold was $104 higher than the global gold prices.

Meanwhile, in the local forex market, most commercial banks sold a dollar at around VND22,350 and VND22,370 each while the ceiling price of the State Bank was VND22,547 per dollar. The rates of each dollar were of 10 or 20 dong lower than yesterday's rate.

Quoc Trinh Gold and Jewelry Company in Ha Trung Street, which was popular for currency exchange in Ha Noi, bought each dollar for VND22,320 and sold each for VND22,360.

On September 28, the SBV slashed the interest rate cap on dollar deposits offered by commercial banks to organisations and companies from 0.25 per cent to zero per cent per year, while the rate for individuals was reduced from 0.75 per cent to 0.25 per cent.

According to the latest report of Vietcombank Securities Company, the SBV circular would closely control the trading of foreign currency in the local market and help curb speculation and hoarding of the greenback, therefore reducing the demand for foreign currency in the market.

The company said that it did not see any obvious factors that may put significant pressure on exchange rate by the end of 2015.

The company said at the end of the year, demand for foreign currency may rise to meet payment demands and production orders at year end, however, the foreign direct investment disbursements and remittances are expected to continue a positive trend.

In the first nine months of this year, disbursements of FDI reached $9.7 billion while the remittances for all of 2015 are expected to reach between $13 billion and $14 billion.