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Gold prices increase sharply during Tet

Update: January, 30/2012 - 09:59

HCM CITY — Gold prices in the domestic market late January rose sharply to over VND46 million (US$2,190) per tael, while the world rate also crossed $1,738 per ounce.

On January 28, prices of the precious metal at some gold trading companies in HCM City hovered around VND46.2 million per tael, up VND500,000 compared with the rates recorded before January 25.

The gap between the buying and selling prices was up to VND700,000 per tael since many major gold traders like Sai Gon Jewellery Holding Company (SJC), Phu Nhuan Jewellery Joint Stock Company (PNJ) and Sacombank Jewellery Limited (SBJ) were still closed for the Tet (lunar new year) holidays.

On the world market, gold prices increased by $70 to $1,738.3 per ounce compared to the previous week.

The world price hike was attributed by market analysts to negative information about the US economy and the EU's public debt, particularly after the US Federal Reserve reported that the base interest rate for the US dollar would be kept unchanged until late 2014. It said this was possible because the US unemployment rate had dropped to 8.6 per cent, the lowest figure since March 2009.

The US Government's loose monetary policy is expected to support gold price hikes in the coming time, analysts said.

Tran Thanh Hai, general director of the Viet Nam Gold Investment and Trading Corporation (VGB), said the gold prices would continue going up because the exchange rate between the Vietnamese dong and the US dollar quoted at banks showed signs of increasing again.

At the Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), the forex rate on January 28 stood at VND21,038 per dollar, up VND136 over the previous Tet.

Speaking about gold prices in the global market in 2012, Hai said they would likely break the record of $1,923 per ounce set in 2011.

Phan Dung Khanh, a senior gold expert, also said that the prices of the precious metal would continue to increase over the next three months to between $1,750 and 1,800 per ounce.

Other market analysts said that gold is proving to be a rather attractive investment channel for short-term investors.

Over the last 30 days, world gold prices increased by $190 per ounce while the domestic price of gold bullion was up by VND3.8 million per tael. In addition, the domestic gold price was VND1.6 million higher per teal than the world price.

Senior financial expert Dinh The Hien said that this year people with savings should invest in gold rather than the real estate market.

However, gold would not be as attractive as the current deposit interest rate of 14 per cent, Hien said.

This was because while investments in gold would likely make more profit, risks would also be higher, while depositing money in banks was a safer option, he said. — VNS

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