Gold still glittering in the pubic eye

illustration photo

Nguyen Thi Cuc, deputy director of Phu Nhuan Jewelry Company (PNJ), said besides rising global gold prices increasing domestic gold price, the State Bank’s currency adjustment had affected gold prices in recent days.

“The domestic gold price is being strongly supporting by rising gold demand,” said Cuc. Cuc also said that PNJ sold 1,600 gold taels, doubling the volume of gold taels it bought on February 16. Especially, on February 15, PNJ sold 1,900 taels and only bought 300 taels.

Experts expected that gold demand rising after the USD/VND exchange rate increased because people had lost belief in the dong and held gold or foreign currency as a safe haven.

Gold shops expected most people used idle money to buy gold and dollars and that affected capital mobilisation of commercial banks.

At present, the domestic gold price is VND1 million ($48.3) higher than global gold price per tael (a tael is 1.2 ounces).

Early in 2011, the State Bank granted gold import quotas to some commercial banks and firms. The quotas were restricted and gold importers had to prepare foreign currency to pay for shipments.

Generally, supply and demand of gold in Vietnam is still unbalanced and has driven up gold prices.

Cuc predicted that global gold prices would continue to increase. The recovery of the US economy is still slower than expectations and inflation is affecting the global economy, so investors still hold gold for safety.

The price of gold in Vietnam climbed to VND37.5 million per tael ($1811 per tael) today, adding VND500,000 ($242) a tael against February 17, 2011. Gold was purchased at VND37.32 million per tael and sold at VND36.44 million per tael at most gold shops in Hanoi at 14am local time.

Sacombank Jewelry Company (SJC) was buying gold at VND36.9 million per tael and sold for VND37 million per tael in Hanoi. At the same time Hanoi-based Phu Quy Jewelry purchased SJC-brand gold at VND37.4 million per tael and sold at VND37.5 million per tael.

Dollars were being bought at VND22,000 and sold at VND22,150 at black market, up VND100 against yesterday. The State Bank published interbank average exchange rate at 20,678 VND/USD, down VND5 against the previous day.

Accordingly, domestic gold prices added over VND1 million per tael compared to early this week, meanwhile exchange rate USD/VND also added VND400 after State Bank executed a 9.3 per cent devaluation of dong on February 11.