Domestic gold drops below world price

VietNamNet Bridge – The domestic gold price has decreased by 100,000 dong per tael compared to the beginning of 2009, while the world price has increased by $20 per ounce.

Sold at 26.15-26.20 million dong per tael, domestic gold this morning saw no change compared to late last week. TheNew York market closed on April 2 for the Good Friday holiday, keeping the domestic price stable.

The quiet gold market has a narrow gap of less than 100,000 dong per tael between sale and purchase prices. The gap applied by some gold companies is just 20,000 dong per tael. Since the profitability of gold investment is considered low at the moment, the gold market remains tranquil.

Domestic gold prices go up and down regularly in accordance with world prices, but they cannot escape the 26-27 million dong per tael zone to create dramatic events as they did in 2009.

The gap between domestic and the world prices has also narrowed because domestic purchasing power is not high enough to maintain a large disparity between the two markets. The supply of in kind gold on the domestic market is no longer short, yet another cause of the gap reduction.

The domestic gold price this morning was higher by only 10-50,000 dong per tael than the world market, while the gap was once 600,000-1 million dong per tael in the last several months. Economic analysts agree that the most reasonable difference would be when the domestic gold price is higher by 80,000-100,000 dong per tael than the world price.

This morning SBJ gold had purchase and sale prices of 26.12 million dong and 26.18 million dong per tael, respectively. Meanwhile, Phu Quy Company quoted the SJC price at 26.13 and 26.21 million dong (purchase and sale) at the same time. Phuong Hoang gold’s prices were 26.15 million dong (purchase) and 26.20 million dong (sale).

The world gold price increased last week thanks to the potential economic recovery, which increased demand for gold as a commodity. The improved situation in Egypt has also helped the euro recover, pushing gold prices up.

Analysts note that many factors are supporting the gold price, especially the good news about the US job market released last Friday. USunemployment remained steady for the third consecutive month at 9.7 percent.

In Asia, the gold price trend was unclear this morning, hovering around $1125-1128 per ounce.

Economists observe that the economic recovery potential supports the gold price, but this could also force the price down because it may lead to currency interest rate hikes.

The light sweet oil price this morning continued increasing, reaching nearly $86 per barrel.

The dong/dollar interbank exchange rate announced by the State Bank of Vietnam also remained at 18,544 dong per dollar. At Vietcombank, the purchase and sale prices of dollars were 19,070 dong and 19,100 dong per dollar

Meanwhile, on the black market, prices were 19,210 and 19,230 dong per dollar for purchase and sale.