Gold down from historic high on dollar recovery

Gold prices in Vietnam declined by around VND200,000 a tael (37.5 grams) to around VND28 million on December 7 as global prices retreated for a third straight day from their record highs as a stronger dollar eroded the appeal of the metal.

Most gold shops bought at VND27.8 million and sold at VND28 million.

After again failing to pierce through the anticipated VND29 million mark last week when prices rose to VND28.9 million, the metal tracked the global retreat though the prices in Vietnam remain around VND600,000 a tael higher than international rates.

Jewelers said demand is rising with the falling prices but there is enough supply since the Government has allowed firms to import gold again.

At the SBJ trading floor, trading volumes were fairly high with more sellers than buyers. More than 280,000 taels changed hands at VND25.33 million to VND26.92 million by 4:10 pm December 7.

On the international market, the metal headed for its biggest three-day drop since April due to the greenback’s recovery.

Spot gold dropped as much as US$25.20, or 2.2 percent, in London to $1,136.2 an ounce. The metal had climbed to a historic high of $1,226.56 on December 3.

A technical report by Eximbank said the metal is in the middle of a correction and may decline to $1,070, or even $1,027.

SPDR Gold Trust, the largest exchange-traded fund backed by bullion, sold 1.53 metric tons last weekend, reducing its holdings to 1,129.96 metric tons, the firm’s website showed.

The US Dollar Index, which tracks the currency’s strength against a basket of six other major ones, rose as much as 0.7 percent, cutting its loss this year to 5.5 percent.

The greenback rallied after the US Labor Department announced that the unemployment rate fell to 10 percent last month from 10.2 percent in October, increasing the possibility that the Federal Reserve would soon raise rates.

Compiled by Thuy Doan

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