Gold tumbles as dollar recovers

Analysts predicted a downward momentum for gold after the US dollar rallied, sending the price of the metal tumbling by 3.6 percent on the international market on yesterday’s trading sessions.

In Vietnam, gold prices declined by VND500,000 a tael (37.5 grams) on December 18. Most gold shops bought at VND26.75 million and sold at VND26.95 million, or VND500,000 higher than global prices.

The metal faced resistance at the VND27 million level for the second time in a week.

The gap between the selling and buying prices was widened to VND200,000 a tael.

Gold traders said extending the gap helped them against risks since global prices are correcting sharply.

At the SBJ trading floor, investors became cautious as prices fell. Volumes were muted with just 154,900 taels changing hands by 12:15pm local time at VND24.765-25.429 million a tael.

Globally, gold for immediate delivery fell as much as $40.4 an ounce, 3.6 percent, to $1,098.1 after fluctuating in a wide range of $1,094-1,122 in New York.

In Asia, bullion rose to $1,107-1,109 an ounce this morning.

The US currency recovered strongly as Standard & Poor’s cut Greece’s credit rating to BBB+ from A- and signaled it may lower the level further, raising concern among investors that the global recession is still weighing on some economies.

Sacombank said carry-trade investors tended to buy dollars heavily to make the final settlement of the year, spurring the greenback’s advance.

Carry trade refers to borrowing in an economy where interest rates are low to invest elsewhere.

Crude oil rose in New York, headed for its biggest weekly rise since October on confidence that fuel demand will raise amid improved prospects for an economic recovery.

Crude oil for January settlement climbed 52 cents, 0.7 percent, to $73.17 a barrel this morning.

Oil has gained 4.4 percent this week.

Compiled by Thuy Doan

Other news