Gold bullion fell a dramatic VND120,000 per tael last night, which should please all those couples looking for wedding rings at this busy time of the year.
The cheaper price came after the yellow metal cast off US$10 from Wednesday to Thursday and closed below US$630 a troy ounce.
Because of the increasing price volatility, all the gold dealers have widened their buy-sell spreads and will keep it that way until the market quietens down a little.
Yesterday Saigon Jewellery Company was quoting VND12.28 million per gold tael in Ho Chi Minh City, and VND12.36 million in Ha Noi, or VND120,000 less than the previous day.
Another of the big dealers, Bao Tin Minh Chau, was buying gold for VND12.25 million a tael and selling for VND12.35, or VND100,000 below the previous day’s price.
At 9:15 am yesterday, the Asian spot price of gold was US$626.90 an ounce, down by nearly US$10 compared to Wednesday afternoon to its lowest price in six weeks.
As the US dollar is the main factor in the world’s precious metals market, expectations of a recovery by the US economy has made the dollar more attractive in the eyes of investors, which explains why the greenback has been strengthening against other hard currencies in the last couple of days.
Speculators are now rushing to sell gold in order to book a profit. It seems nobody wants to buy the metal as the dream of US$700 an ounce has once again become just that.
Quite a few analysts reckon gold will not see any further sharp increases. It’s interesting to note that China’s output of the metal has climbed by 8% this year.
So far this year, the US dollar price of gold, which peaked on May 12, has increased by 39%. In fact gold has been steadily rising since 2001. Last year its dollar price increased by 18%, while the greenback itself rose by 14% against the euro.