The domestic gold price will unlikely to be below VND35 million (US$1,750) per tael due to increasing global price and strong dollar, said a financial expert from a Ho Chi Minh City-based bank.
|Financial experts predict gold price will not fall below VND35 million per tael this year (Photo:Minh Tri)|
“Investors in foreign markets will buy gold strongly as the global price is in the bottom. Local businesses, meanwhile, are limited in buying gold from abroad,” said financial expert Phan Thanh Hai of the Orient Commercial Joint-Stock Bank.
“The State Bank of Vietnam has announced an import quota of around 300-500 kilogram of gold only, which will expire at the end of February this year. Thus local gold traders will have to wait for an appropriate importing period, when price of the precious metal is reasonable”.
Vietnam’s central bank granted more quotas to import gold by year-end of 2010, in a bid to cool domestic gold prices, the Saigon Economic Times newspaper said in its online report.
The rise last year in the gold price and the dollar/dong exchange rate were among the reasons for higher market prices, Prime Minister Nguyen Tan Dung said, raising fears Vietnam’s inflation for the whole year may jump to double-digit figures.
The gold quotas expired on Dec. 31 last year and with a volume higher than the previous permission in early November, the newspaper said.
Hai expected the international gold price will decline this week before going up until the Lunar New Year.
“The domestic price will follow the global one. Therefore gold will be hardly to drop below VND35 million per tael,” he said.
Prices of the precious metal will not be effected by the central bank’s import quota due to the greenback, Hai also noticed.
“Traders granted the quota will have to use a large amount of dollar to buy gold, which will likely to prompt to a shortage of the greenback. The stronger dollar then will boost the yellow metal’s price,” he said.
No more payments by gold
Surging gold price have seen property investors prefer to trade by cash.
“Earlier, a house was sold at the price of 130 gold taels, equal to VND3 billion ($150,000), more than one year ago. However, with gold prices having increased sharply, it was offered at the price of around 80 taels only,” said Nguyen Hung of a property-trading firm in HCMC.
“Therefore many investors hesitate to trade property by gold,” he said.
He also noticed property sellers in the city asking for payments by gold tended to reduce their prices.
A land with an area of 1,000 square meters on Mac Dinh Chi Street in District 1 was offered at the price of 25 taels per square meters earlier, but now the seller is willing to sell at 21 taels per square meters.
Statistics from the real estate firm ACBR show the number of transactions in gold has slumping since 2000 because of the fluctuation in gold prices.
The ratio of real estate purchases by gold at ACBR decreased from 40 percent in 2009 to less than 10 percent in 2010.