Gold gains as FED maintains low benchmark rates

The price of gold rose by VND300,000 a tael in Vietnam on December 17 as global prices hiked sharply after the US Federal Reserve announced it would continue to maintain low interest rates at nearly zero, boosting demand for the metal as an alternative asset.

Bullion was bought at VND27-27.3 million and sold at around VND27.3-27.4 million.

Buying continued to take the upper hand on the bullion market. Trading volume was fairly steady.

On the SBJ trading floor, trading was thin with more than 150,000 taels traded at VND25.2-25.5 million by 1pm local time.

On the international market, the precious metal advanced after the FED said it would keep borrowing costs low until the US economy was fully recovered.

In New York, spot gold gained as much as US$14.5 an ounce, 1.3 percent, to $1,138.5.

Holdings at SPDR Gold Trust, the world’s largest exchange-traded fund backed by gold, increased by 3.936 metric tons to 1,120.514 metric tons yesterday, the firm’s website showed.

The FED’s decision fortified the burden on the greenback’s debasement. However, optimism about the banking industry and economic recovery pinned the US currency at a 10-week high against the euro.

Morgan Stanley said gold will rise to a record next year before declining in 2013 as a rebounding US economy forces the FED to raise rates.

The dollar exchange rate was at nearly $1.45 a euro in Asia this morning.

Crude oil headed for the biggest advance within the last month after the US Energy Department announced reserves fell to the year’s lowest level.

Crude oil futures for January delivery rose $1.97 a barrel, 2.8 percent, to close at $72.66 a barrel.

In Asia, crude oil climbed to nearly $73 a barrel this morning.

Compiled by Thuy Doan

Other news