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Gold price remains mystery
Two more gold trading floors became operational on November 28, the Vietnam Gold Transaction Centre and Than Tai Sacombank Gold Trading Floor. Meanwhile, gold prices continue to constantly fluctuate.
Gold price to keep fluctuating for six more months
After surging sharply by $60/oz late last week, the world’s gold price is now hovering around $800/oz, leading the domestic gold price to hover around VND17mil/tael. In principle, the gold price always increases in the last months of the year. However, no one knows for sure how the gold price will perform in the time to come.
According to Tran Thanh Hai, General Director of Vietnam Gold Business Company, VGB, which is running the Vietnam Gold Transaction Centre, the gold price greatly depends on the dollar's value. The US government has been applying a lot of measures to recover the economy. However, experts say that it will take no less than six months to stabilise the economy. Therefore, the gold price is expected to fluctuate continuously for the next six months and depend heavily on the new policies to be undertaken by the US government.
Worries have been raised that the financial package implemented to rescue the US economy will lead to a higher money supply and higher inflation, which would cause the dollar to devaluate. However, Hai believes that with the new US government, the US dollar will recover. Once the dollar recovers in value, gold will not increase so sharply in price, and the demand for gold in the US and the world will not be high.
Nguyen Ngoc Que Chi, General Director of Sacombank’s Jewellery Company, which is running Than Tai Sacombank Gold Trading Floor, also said that it is impossible to forecast the gold price's performance.
The domestic gold price has been as much as VND2mil/tael higher than the world’s price. It is because people feared that gold imports would be restricted, not because of a lack of gold in the domestic market. However, when the world’s price increased, the domestic price did not rise, making the world’s and domestic prices closer.
Opportunities for hardy investors
Huynh Trung Khanh, Deputy Chairman of the Vietnam Gold Business Association, said that the world’s price increases have been stable in the last few days because the US market was closed on Thanksgiving. The world’s gold market is now listening for news from India. From now to the end of the year, gold will be traded at prices between $780 and 830/oz, he predicted.
Khanh said that in general, international investors will ‘close their books’ on December 15 to prepare for the Christmas and New Year holidays.
Hai said that the unpredictable gold prices will cause difficulties for investors, but will bring opportunities to experienced investors with resilience.
Nguyen Ngoc Que Chi advised investors to keep close watch over the gold prices and the world’s political situation in order to make suitable decisions.
SJC gold was quoted at VND17.02mil/tael (sale) and VND16.93mil/tael (purchase) at 9 am of December 1. Meanwhile, the world’s gold price at the same time was $811.50-812.00/oz, equal to VND17.022-17.033mil/tael, or VND13-92,000/tael higher than the domestic prices.
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