Gold prices climb to 10-month high

HA NOI — Gold prices in the domestic market hit a ten-month high yesterday and remained well above the global price, despite last month's intervention by the State Bank of Viet Nam (SBV) to stabilise the market.

The cost of gold hit VND46 million (US$2,190) per tael after the global price reached $1,698 an ounce - one tael is equal to 1.2 ounces - pushing the domestic price to 7.5 per cent above the global index.

This comes despite last month's intervention, when the SBV ordered Viet Nam's largest gold refiner the Sai Gon Jewelry Co (SJC) to stop producing SJC gold bullion. From August 23, SJC began producing only gold bullion of 99.99 per cent purity under the direction and supervision of the central bank, which also oversees the scale of production, when production takes place and the raw material gold supply.

Yesterday SJC, which has a 90 per cent share of the domestic market, listed buying/selling price at VND45.8/46 million a tael, a rise of VND300,000 on the previous day. Doji Group also raised its prices to VND45.45/45.6 million a tael.

Tran Nhu My, director of the Doji Group, said that people turned to gold assets as a safe-haven in the wake of negative reports from the financial markets.

My added that the lack of a readily available supply of gold locally, also played a part in pushing the domestic price higher than its global counterpart.

Using the official exchange rate of Vietcombank, local gold prices were still roughly VND2.6 million a tael higher than the world price.

The world price started to pick up late last week after the US Federal Reserve hinted at a fresh stimulus package, or a third round of quantitative easing (QE3), to aid the US economic recovery.

World gold prices marked their third consecutive monthly rise with a 4.5 per cent increase in August, the strongest rise so far this year. — VNS