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Gold plummets below VND17 million per tael
The price of gold in Ho Chi Minh City plunged Tuesday by VND800,000 (US$48) to VND16.98 million ($1,021) per tael [37.5 grams], its lowest level in more than seven months.
Huynh Trung Khanh, a consultant for the Vietnam chapter of the World Gold Council, said a slump in the global gold price recently has pushed the domestic price down and Asian investors are selling heavily to cut losses.
Global gold prices plummeted to 8-month lows Tuesday as the dollar's rally triggered a massive sell-off, hitting oil and industrial metals as well, according to Reuters.
The precious metal is down by more than 20 percent since hitting a record high of $1,030 per ounce on March 17.
The dollar hit a 6-month high against a basket of major currencies as investors looked beyond U.S. growth worries to a slowing global economy.
A stronger U.S. currency makes commodities priced in dollars more expensive for holders of other currencies.
Oil hit $112.48 a barrel, the lowest since early May, as the market focused on events in currency markets and the International Energy Agency predicted higher supplies.
An SJC representative said his firm sold around 10,000 taels yesterday, five times higher than the buying volume.
Trading volume at the Saigon Gold Exchange also surged, with 459,950 taels worth VND7.7 trillion exchanged compared to an average of 200,000 taels traded a day last week.
Some gold shops in downtown HCMC said the precious metal’s plunge saw people buying heavily.
But Khanh warned buyers should be cautious because domestic gold prices are still VND600,000-VND700,000 per tael higher than global prices.
In related news, the Vietnamese dong dropped, snapping a seven-day advance, on speculation that investors are selling the currency to invest in gold.
The dong dropped the most in more than two weeks as the U.S. dollar rallied against the euro after commodities plunged.
Local investors may be selling dong to buy gold after the metal dropped to its lowest level in more than seven months, said Lai Tat Ha, head of currency trading at Hanoi-based Technological and Commercial Bank.
Government bonds gained for a third day, with the yield on the benchmark five-year note trimming 25 basis points to 16.86 percent, marking the lowest level since June 2, according to a daily fixing price from 10 banks compiled by Bloomberg. A basis point is 0.01 percentage point.
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