In the domestic market, the gold price has slid from 18 million dong an ounce last weekend down to 17.73 million dong/ounce yesterday, a loss of 200,000 dong/ounce.
The world's gold price also dropped from the threshold of nearly US$900/ounce.
On January 6, gold traders of Phu Nhuan Jewellery Co (PNJ) and Eximbank announced the same buying-selling prices at 17.75 million and 17.83 million dong/ounce. Other gold shops in HCM City listed at 17.73 million-17.82 million dong/ounce. The city reported a weaker purchasing power while the demand for selling out gold was increasing.
Different from the period when the gold price surged from 17 million dong to closer 18 million dong/ounce, the selling-off demand was higher.
According to Nguyen Thi Cuc, deputy general director of PNJ, the gold price could go lower in the next few days so the investors are still waiting.
Lang Van Hai, director of Saigon Silver and Gold Jewellery Co said the sale of gold pieces recently reduced by 30-40% compared with the previous period while the sale of jewellery was down 20% despite the purchasing season of Lunar New Year. In comparison with the previous months, the gold price remained very high. People are expecting a deeper fall in gold prices, he added.
Gold prices fell sharply in the week-early trading session because the US dollar price depreciated against euro. Each euro was exchanged to only US$1.35, gold traders explained.
According to the assessment by Eximbank's analyst, the main factor affecting reduction in gold prices is the rally of US dollar. US dollar price increased against euro in the past three weeks as the investors expected the new US President Obama's policies to boost the economic recovery.
Huynh Trung Khanh--Advisor to the Gold Council in Vietnam stated that the domestic gold market will be difficult to connect with the world market as Vietnam has stopped importing gold and banned gold export.
Meanwhile, US dollar traded in the free market yesterday rose by 5-10 dong per US dollar. In HCM City, US$1 was converted into 17,510-17,512 dong. And the listed forex rate of commercial banks was down 2 dong/US dollar. The US dollar selling price at Vietcombank and Eximbank was 17,480 dong/US dollar. In the interbank market, the average forex rate announced by the State Bank of Vietnam also dipped 2 dong/US dollar from the earlier week.
A joint stock banker forecasted that it is hard to see another sudden change in the dong/US dollar forex rate after the State Bank raised the interbank average forex rate by 3% to around 17,500-17,600 dong/US dollar. But if the export activities become worse in coming months, the support for exporters will be very necessary.
A source from the commercial banks said that the US dollar buying demand of enterprises recently is increasing while exports are falling. According to Dr Tran Hoang Ngan, vice head of HCM City Economic University and member of National Monetary Finance Advisory Council, the US dollar price will not surge too high. (Lao Dong)
Friday, February 20, 2009
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Great analysis as always Dan. Thank you for sharing your professional insights with us. I've bern lurking on and off here since this blog first started and always found it refreshingly candid and unbiased.Goldankauf Berlin
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