Surging demand drives up gold price - Economy

Updated

October, 03 2012 10:31:51

Surging demand drives up gold price

HA NOI (VNS)— Gold prices in the domestic market have remained much higher than the world market as demand, especially from commercial banks, has exceeded supply.

Industry insiders said that commercial banks are boosting their gold purchase to prepare for the November 25 deadline repayment of gold deposits. According to the State Bank of Viet Nam (SBV) regulations, commercial banks will have to halt mobilisation and lending in gold from that date. Meanwhile, gold deposits are estimated at 4.6 per cent of the banks' total deposits or VND122.5 trillion (US$5.89 billion) at the end of June.

Nguyen Thanh Truc, CEO of Agribank's Gold Corporation JSC (AJC) said his company has converted 2,000 its AAA gold into SJC branded ones but all the sum was sold to commercial banks already.

It was reported that Asia Commercial Bank (ACB), DongA Bank, Techcombank, Eximbank and Sacombank are still continuously buying gold.

As demand exceeded supply, local gold prices continued to rise yesterday to VND47.8 million per tael, roughly VND3 million higher than the world price according to the Vietcombank's rate which yesterday rose VND20 against the previous day to VND20,870 per US dollar.

SJC gold yesterday was listed at VND47.61 million per tael for bid and VND47.8 million per tael for ask, up VND250,000 from the previous day's close.

However, Thang Long gold, produced by Bao Tin Minh Chau company, was quoted at VND44.6 million per tael for bid and VND45.1million per tael for ask, almost unchanged from the previous day's close.

Analysts have been calling the SBV to allow gold imports to stabilise the local market. — VNS

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