Gold makes slight correction

The price of gold in Vietnam shrank VND30,000-50,000 per tael (1.2 ounces) over the previous day on August 18 as global price almost treaded water in the trading sessions last night and this morning.

Yesterday, the metal surpassed VND45.5 million as global price approached $1,800 an ounce. However, support momentum weakened after immediate-delivery gold only rose $1.9 an ounce to close at $1,790 on the Comex in New York.

In Asia this morning, gold faintly fluctuated. After slightly dropping at the beginning of the trading session, the precious metal rebounded to trade at $1,791.4 an ounce, an increase of $1.4 an ounce over the closing price in New York, at 9:40 am Vietnamese time.

Sacombank Jewelry Company bought gold at VND45.38 million and sold at VND45.44 million as of 10 am local time.

Hanoi-branch Saigon Jewelry Company purchased gold at VND45.35 million and sold at VND45.49 million at the same time.

Domestically, gold fetched around VND500,000 a tael higher than global price.

State-owned Vietcombank bought the greenback at VND20,800 and sold at VND20,824. On free market, dollars rose by VND10 per dollar over the previous day to buy at VND20,830, and sell at VND20,870.

Internationally, although having advanced for three consecutive trading sessions, gold was unable to highly advance due to a stronger US dollar. The euro exchange rate against the US dollar hovered around $1.44 a euro since the beginning of this week. The greenback remained to be a safe-haven along with gold and Swiss franc as concerns over the European sovereign-debt turmoil lingered.

Holdings at SPDR Gold Trust, the largest exchange traded fund backed by bullion, rose by 0.7 percent to nearly 1,272 metric ton yesterday.

Meanwhile, the US bank Wells Fargo said gold market is a bubble poised to burst after prices surged to a record this year. The bank’s expert said that there could be substantial risk to gold once the fear that the world is coming to an end subsides.

The German economy, Europe’s largest, almost stalled in the second quarter as the region’s debt crisis weighed on confidence. Gross domestic product rose 0.1 percent over the previous quarter, the lowest pace in the past two years.

Bank of England plans to run the second quantitative easing package amid increasing jobless rate. This movement would trigger inflation and benefit gold price.

By Thuy Doan

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