Bullion in Vietnam surged VND200,000 a tael (1.2 ounces) to a near all-time high on September 4, with gold traded globally at near US$1,000 an ounce due to a weak dollar spurring on demand for the metal.
Gold was bought at VND21.60 million and sold at VND21.70 million at most gold shops, fetching VND400,000 a tael lower than global prices.
With a low demand on rising supply, domestic gold prices were not able to catch up with the global changes.
Trading volume on bullion markets was improved after being muted for the last five months, as the prices have reached the level that most investors expected.
A representative of a Hanoi-based gold dealer, Bao Tin Minh Chau, said its trading volume rose by 1.5 times yesterday with 80 percent of customers going to the shop to sell gold.
Phu Nhuan Jewelry said it bought 3,000 taels and sold 2,000 taels yesterday.
On the SBJ trading floor, matching prices crossed VND21 million a tael. Trading volume, however, was not as high as yesterday.
By 10am local time, just around 275,000 taels changed hands at VND21.07 million to VND21.31 million a tael.
Globally, the precious metal jumped to a six-month high on speculation that a weak dollar will boost demand for precious metals as an alternative investment.
Gold last traded at $1,000 an ounce on Feb 20.
In New York, the metal price for immediate delivery rose as much as $13.1 an ounce, 1.3 percent, to $992.7 an ounce.
Gold futures for December delivery advanced $19.2 an ounce, two percent, to close at $997.7 an ounce after earlier gaining as much as 2.1 percent to the highest price for a most-active contract since February 24.
In Asia, gold fluctuated around $992 an ounce this morning.
Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 14.65 tons to 1,078.01 tons yesterday, the firm’s website showed.
The European Central Bank yesterday announced it would keep the euro interest rates at a record low of one percent and signaled no quick withdrawal of emergency stimulus measures.
The demand for gold as a hedge against inflation has been boosted as investors are concerned that the greenback may decline further, causing long-term inflation pressure.
The US Dollar Index, a six-currency gauge of the greenback’s value, earlier fell by 0.5 percent before making a recovery.
The dollar exchange rate against the euro remained at near $1.43.
Crude oil slightly slid to below $68 a barrel.
Crude oil futures for October delivery fell $0.09 a barrel, to close at $67.96 a barrel on the New York Mercantile Exchange.
The State Bank of Vietnam fixed dollar exchange rate at VND16,975. State-owned Vietcombank traded the greenback at VND17,824.