Gold treads water as global prices stall

The price of gold in Vietnam hovered around VND27.7 million a tael (1.2 ounces) on May 31, as global prices showed signs of stall.

The precious metal was bought at VND26.65 million and sold at VND27.7 million. Domestic gold prices, which included import tariffs and processing fees, was fetching VND350,000 a tael lower than global prices.

Muted trading prompted jewelers to fix a narrow gap between buying and selling prices.

According to gold traders, the metal was at a less attractive level for buyers, as well as for sellers.

In Asia, gold shrank to fluctuate between US$1,211 and $1.213 an ounce this morning as investors realized profits after the metal climbed to a 10-day high last week.

Ending the trading session in New York last Friday, spot gold rose as much as $2.3 an ounce to finish at $1,215.3, the highest level since May 18.

Bullion prices received a boost amid worry that the European debt crisis might worsen, in light of Fitch Ratings’ decision to strip Spain of its AAA credit grade, which pushed the euro lower.

Bloomberg quoted Gavin Wendt, senior resource analyst with Mine Life Pty Ltd. in Sydney, as saying prices will stabilize this week. Gold’s fortunes are fluctuating daily in accordance with waxing and waning investor sentiment with respect to the European debt crisis. This situation is unlikely to resolve itself any time soon.

Holdings at SPDR Gold Trust remained at a record 1,267.9 metric tons, according to figures on the company’s website. The company hasn’t sold gold since the Greece’s debt crisis threatened Europe.

The euro has lost 7.8 percent this year against a basket of major currencies while the US dollar has gained 9.2 percent, and the yen 11.4 percent.

This morning in Tokyo, the euro exchange rate slightly rose to $1.23 a euro from its closing price in New York last week.

Crude oil futures for July delivery were trading above $75 a barrel this morning in Asia. Last week, the contract slid $0.58, or 0.8 percent, to $73.97 a barrel.

The greenback exchange rate was stable at VND19,000. A dollar was bought at VND18,970 and sold at VND19,000 on free market in Hanoi. State-owned Vietcombank bought dollar at VND18,960 and sold at VND19,010.

Compiled by Thuy Doan

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