Gold sharply rises

Most gold shops bought the precious metal at VND36.35 million and sold at VND36.45 million as of 9:30 am local time.

Hanoi-based Phu Quy Jewelry bought SJC-brand gold of Saigon Jewelry Company at VND36.37 million and sold at VND36.47 million.

Sacombank Jewelry Company announced the prices at VND36.26 million for buying and VND36.39 million for selling.

Domestic gold price was supported by a rally on global markets, and a climbing US dollar exchange rate on local free market.

Dollars were bought at VND21,490 and sold at VND21,530 on free market in Hanoi this morning, up VND50-60 per dollar over the previous day.

Yesterday, Prime Minister Nguyen Tan Dung ordered the State Bank of Vietnam to take actions to stabilize the foreign exchange rates and gold market as the gap between official and black rates widened and the price of the precious metal surged sharply.

Last month, the price of gold in Vietnam hit an all-time high amid a devaluing currency and an accelerating inflation, prompting the government to allow firms to import the metal.

Globally, gold strongly jumped as European sovereign-debt crisis boosted demand for the precious metal as a safe-haven.

In addition, Lion Fund Management Co became the first company to receive approval from China’s government to invest in overseas gold-backed exchange-traded funds. It is expected that there would be more demand from China as the barrier for entrance into the gold market had been lifted.

Gold for immediate delivery rose as much as $19.9 an ounce, or 1.5 percent, to close at $1,388.2 an ounce on the Comex in New York. Earlier, the metal surged to $1,391 an ounce, the highest level in the past two weeks.

In Asia, the precious metal declined at the beginning of the trading session due to profit-taking, however, it soon reversed. Spot gold was trading around $1,389 an ounce, up nearly $1 an ounce over the closing price in New York as of 10:05 am Vietnamese time.

The euro remained under depreciation pressure against the US dollar. However, Europe’s escalating and spreading debt woes urged investors to buy gold to avert risk. Credit ratings agency Standard & Poor’s said it might downgrade Portugal’s rating.

The euro exchange rate against the greenback dropped to $1.3 a euro, the lowest level in 10 weeks, in Tokyo this morning from $1.31 the previous day.