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Gold to fall to VND16 million per tael, analyst expects
Local gold edged up Friday as the precious metal rebounded on international market, but an analyst from the World Gold Council expects the yellow metal to fall to VND16 million a tael, or 1.2 ounces, in the near future.
Gold prices at Saigon Jewelry Company, Vietnam’s largest gold trader, regained VND100,000 to hi VND16.72 million (US$1,004) per tael on the day.
The precious metal fell to VND16.62 million a tael Thursday, the lowest level over the past six months of the year.
“Domestic gold followed the international gold trend” said Hu Trung Khanh, a consultant for the Vietnam chapter of the World Gold Council.
“I expect the international gold price will not change much next week at around $730-780 per ounce.
“But the domestic price remained higher than the international price, so it’ll have to make correction to close i on the international price. So, I expect domestic gold to land at around VND16 million per tael.”
Gold bounced more than 2 percent in Europe Friday from the previous session’s 11-month low, reflecting gains across the board for precious metals, as the dollar retreated from highs against the euro, according to Reuters.
Spot gold rose to $753.90-755.10 an ounce at 09:59 GMT from $739.60-741.20 an ounce late in New York.
Earlier it rallied more than 2 percent to a session high of $757.90.
“The higher euro-dollar has taken away selling pressure from investors,” Commerzbank senior trader Michael Kempinski said.
The dollar eased broadly as a more optimistic view of investment bank Lehman Brothers’ future boosted equities and prompted currency traders to cash in on recent gains.
Gold typically moves in the opposite direction to the US currency, as it is often bought as a currency hedge.
Traders are awaiting further news on Lehman later in the day, amid speculation the bank may be planning an announcement.
Gold also is being helped by a pick-up in crude prices.
Oil rose over $1 a barrel on fears Hurricane Ike could affect production in the United States, the world’s biggest energy consumer.
Traders also are looking to economic data due out later in the session for clues as to the future direction of the dollar.
US retail sales numbers and PPI data for August are due out at 12:30 GMT, and the Reuters/University of Michigan consumer confidence data is due at 13:55 GMT.
“The US economic data released in the afternoon might be negative for gold, as our US economists expect that the consensus might be surprised with better figures for retail sales and PPI,” Dresdner Kleinwort said.
Analysts remain cautious over the outlook for gold.
Although the dollar is softening, overall the US unit is expected to climb higher in value.
Traders say they have seen firm demand for gold coins, bars and jewelry, but the support this lends to prices may not be felt until they fall to lower levels.
“Physical demand increased again around the $750 levels, but a lot of customers expect a bigger (price) drop in the future,” Kempinski said.
“Some customers are looking for $700.”
Thanhnien
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