Gold retreats as dollar advances

The price of gold in Vietnam once again fell below the VND27 million mark on December 22 as global prices declined on depreciation pressure from the greenback.

Bullion was bought at VND26.35-26.7 million and sold at VND26.7-26.8 million, a decrease of around VND350,000 a tael.

The metal failed to remain above VND27 million for the third time within the last 10 days.

Gold traders expected trading volume would improve as low prices may attract more customers back to the bullion market.

Despite a sufficient gold supply and stable dollar exchange rate, domestic gold prices continued to maintain a rather high difference from global prices.

It was fetching nearly VND1 million higher than global prices.

Trading was thin on the ACB gold exchange with 11,160 taels changing hands by 10:35am local time at VND24.63-24.73 million a tael.

Meanwhile, at the SBJ trading floor, volume reached 223,260 taels with matching prices around VND24.492-25.013 million a tael by 2pm.

On the foreign market, gold dropped 1.9 percent as a stronger dollar eroded the appeal of the metal as an alternative asset.

Gold for immediate delivery fell as much as US$21.1 an ounce to $1,092.3 an ounce on the New York Mercantile Exchange. Earlier, the metal fluctuated between $1,089 and $1,119.

In Asia, the metal was traded at $1,094 this morning.

Holdings at SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, increased by 6.1 metric tons to 1,132.7 metric tons yesterday.

The US currency rallied as positive economic information signaled prospect that the country would soon remove measures used to fight the global financial crisis.

Investors buying to make final settlements at the end of the year also backed the greenback’s rate.

The dollar exchange rate against the euro topped a three-month high at below $1.43 on the global market.

Crude oil futures for January delivery, which expired yesterday, slipped $0.89 a barrel, 1.2 percent, to close at $72.47 a barrel.

In Asia, February-delivery crude oil traded at nearly $73 a barrel this morning.

The OPEC held a meeting today to discuss production, which is expected by analysts to be unchanged.

The State Bank of Vietnam continued to keep the dollar exchange rate at VND17,941. State-owned Vietcombank purchased the greenback at VND18,475 and sold at VND18,479.

Compiled by Thuy Doan

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