Local gold price fall after Lunar New Year holidays

Local gold price recorded an impressive fall at companies and banks in the first trading day early this week after the Lunar New Year holiday, while the US dollars on the free market surged to over VND21,000.

Gold was bought at VND44.97 million and sold at VND45.17 million a tael by Saigon Jewelry Holding Company (SJC) on Wednesday afternoon ( Feb 20), decreasing some VND180,000 a tael against the day before and shrinking VND500,000 a tael from February 8

Meanwhile, gold prices on global markets have gone down over US$ 50 an ounce in the past ten days to stand at $1,610 an ounce late last week. And trading prices on the European market inched up to $1,616 an ounce Monday afternoon, causing the difference between global and local price gap to widen to over VND4.5 million per tael.

SJC reported that locals rushed to buy gold before and after Tet, and many purchasing only a few taels for good luck. There were not many investors joining trading despite the price of the precious metal continue to fall.

Experts believed that weaker gold demand from local banks will help narrow down the gap of global and local prices in the long run.

Relating to temporary export of gold bars and re-import of solid gold, an official of the State Bank of Vietnam’s HCMC Branch announced on February 8 that DongA Bank had been licensed and completed re-importing about 100 kilos of gold.

Other lenders like Techcombank and Sacombank will take turns converting gold bars into solid gold to have them processed into SJC gold bars in the near future.

The central bank will continue to license a number of banks such as Techcombank, Sacombank and Viet A bank to temporarily export and re-import gold bars.

It is expected that in the next few months, the market will have an extra supply of SJC gold bars.

However, the move hasn’t left considerable impact on consumer psychology in the context that local residents still consider gold buying as a way to wish for good luck at Tet.

Meanwhile, the US dollar price has increased against Vietnam dong in the unofficial market since the sixth day of the first lunar month or last Friday, staying at more than VND21,080-21,012  at certain times.

But it fell to around VND21,080 yesterday.

The surging price of US dollar has been fueled by rising demand for foreign currencies among local travelers while supply is limited, economists forecast.

In the meantime, the inter-bank between VND and US dollar exchange rate still remains unchanged, at VND20,828 and the selling price of the dollar still hovers around VND20,880 at lenders with no change recorded compared to pre-Tet periods.

Source SGGP, DTTC, translated by MT

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