Bullion nose-dives; dollar strengthens

Global gold price prolonged its downward momentum July 7, falling below the US$1,200 mark, pushing down the domestic price by VND150,000 over the previous day.

The dollar exchange rate on black market unexpectedly spiked after declining for two consecutive days, rising to VND19,140 per dollar, which helped hold back gold’s downward spiral.

Saigon Jewelry Co., Vietnam’s biggest gold shop, bought gold at VND28.13 million and sold at VND28.2 million.

Sacombank Jewelry Co. purchased the metal at VND28.16 million and sold at VND28.2 million.

At Hanoi-based Phu Quy Jewelry Co., SJC-brand gold was bought at VND28.16 million and sold at VND28.23 million.

Domestically, bullion fetched VND400,000 higher than the global price.

Representatives of many jewelers said that they expected that this correction would strongly boost buying.

Globally, the bullion retreated as rallying US stock markets sapped its attractiveness as a hedge to protect investors’ wealth.

Spot gold fell as much as $14.8 an ounce, or 1.2 percent, to close at $1,195.1, the lowest level of the past six weeks. Earlier, the metal plunged to near $1,188 an ounce.

In Asia, the rate was about $1,194-1,195 an ounce this morning.

SPDR Gold Trust, world’s largest exchange-traded fund backed by bullion, sold 2.43 metric tons of gold yesterday, bringing its assets to 1,316.5 metric tons, figures on the company’s website showed. Recently, the company has continuously net sold after net buying for several months.

Analysts said that prices under $1,200 would entice investors back to the metal amid speculation that the European debt crisis may derail global economic recovery.

The euro exchange rate against the US dollar sank to near $1.27 a euro in New York yesterday. The rate was above $1.26 this morning in Tokyo.

Crude oil futures for August delivery slid $0.16 a barrel to close at $71.98 a barrel on the New York Mercantile Exchange.

This morning, the liquid slightly revised to just above $72 a barrel.

By Thuong Nhan

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