Gold advances as slumping dollar spurs demand

The price of gold in Vietnam rose to VND27.2 million a tael on January 11 as global prices spiked on the greenback’s debasement.

Most gold shops bought at VND27.1 million and sold at VND27.2 million, an increase of VND200,000 a tael over last weekend.

Domestic gold prices were fetching VND150,000-200,000 a tael lower than global prices.

Trading volume has been rather steady since the beginning of the New Year with prices continuing to hover around VND27 million.

However, optimism that the metal would hit a new high this year prompted investors to increase their holdings. Buying was currently the mainstream on the bullion market.

At gold exchanges, volumes remained low while the deadline for investors to close their accounts was still a long way off.

The Government on January 6 ordered the closure of gold exchanges by March 30 this year saying gold exchanges do not benefit the national economy and many investors had lost all their money in gold investment deals.

Investors who bought gold last week had a good chance to take profits this morning as global prices climbed strongly. However, low liquidity prevented them from realizing profits as easily as before.

Eleven-thousand taels changed hands at VND25.2-25.66 million by 10:15 am at the ACB trading floor. On the SBJ trading floor, 12,200 taels traded at VND25.11-25.77 million at the same time.

Globally, the precious metal advanced as the US currency declined, tempting investors to seek the metal as an alternative investment.

In Asia, spot gold rose as much as US$18.3 an ounce over the closing price in the last trading session in New York, 1.6 percent, to $1,157 this morning.

Gold futures for February delivery rose 2.1 percent to $1,163 on the New York Mercantile Exchange.

The metal touched a historic record of $1,227.5 an ounce on December 3 last year.

The US Dollar Index, which tracks the greenback’s strength against a basket of six major currencies, fell as much as 0.7 percent as the Labor Department announced an unexpected loss of 85,000 jobs in December.

Analysts said the US Federal Reserve would not be able to raise lending interest rates soon. The greenback was expected to continue to suffer depreciation pressure as the FED would have to maintain measures to boost the economy.

The dollar exchange was at $1.45 a euro in Tokyo this morning.

Crude oil climbed to a 15-month high on positive information.

Crude oil imports by China, the second-largest energy consumer, climbed to a record 203.8 million metric tons last year.

In addition, freezing temperatures in the US, Europe and Asia boosted heating fuel demand.

February crude oil gained $0.63 a barrel to $83.38 this morning.

Compiled by Thuy Doan

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