State Bank to intervene in gold price, if needed

Recent hike in gold prices is part of the psychological impact of the Brexit vote. The State Bank of Viet Nam will keep track of gold price fluctuation and intervene if necessary. - Photo dantri.com.vn

Canh said the intervention to stabilise the gold market would be carried out under the Government's decree on gold bar transactions.

"The reason for the hike in gold prices in recent days is the psychological impact following the Brexit vote," Canh said.

The gold market calmed yesterday after the central bank's announcement.

Insiders said the fluctuation of gold prices in recent days had resulted in losses of millions of Vietnamese dong for buyers in one night but profited gold companies. In many gold shops, the price jumped nearly VND2 million (US$89) on Wednesday but immediately dropped by more than VND2 million yesterday.

Gold prices of the Sai Gon Jewelry Holdings Co (SJC)'s suddenly slid yesterday by VND2.3 million to VND36.5 million and VND37.5 million per tael at buying and selling, respectively.

Some other companies, including Phu Quy and Bao Tin Minh Chau, listed the buying price from VND36.4 million to VND36.85 million per tael, and the selling price at between VND36.9 million to VND37.72 million.

A small survey by local reporters showed that the number of people coming to jewelry shops in Ha Noi yesterday dropped 30 per cent compared with the days before.

To Linh Giang, a local resident from Bach Mai Street, said the increasing price of SJC gold in recent days made him dizzy.

"I bought gold on the day it was VND35 million per tael. I made a small profit but I do not know if I should sell now to make more profit or continue waiting. It is because there are many predictions that the gold price will continue going up," said Giang.

Le Thi Ly from Truong Dinh Street said she heard that gold prices could increase to VND50-60 million per tael so that she would wait. "I bought gold on the day its price was VND37 million per tael, if I sell it now I will lose."

According gold traders, many people who bought gold for speculation rather than savings failed to foresee the price trends. This was one reason the gold market was quiet yesterday.

On the global gold trading floor, gold was traded at US$1,358 per ounce (also at $1,629 per tael or 1.2 ounce).

On the same day, the central bank increased its reference rate per American dollar by eight dong, to VND21,869.

RELATED CONTENTS:
	Brexit drives up gold prices
	Gold prices rise on global trend
	Tug of war over gold continues
	Local gold price matches global market price