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Gold finds resistance at VND19.85 mln level
Gold remained unchanged Monday at the new record level set last Saturday as investors and retail gold shops booked profits.
The precious metal’s price at the Saigon Jewelry Joint Stock Co., Vietnam’s biggest gold trader, was VND19.85 million a tael, or US$946 an ounce. A tael is equal to around 1.2 ounces.
Many retail shops in Ho Chi Minh City sold heavily to cash in on previous rises. “We bought around 500 taels two days ago. Today we sold the entire amount,” newswire VnExpress quoted a shop owner in District 1 as saying.
The central bank has given approval to some companies to export gold, the director of the Department for Foreign Currency Management, Nguyen Quang Huy, told Sai Gon Tiep Thi newspaper without disclosing their names.
The companies receiving the permission would also be allowed to import a similar amount of gold when “the gold market cools off,” he said, adding they therefore continue to buy both bullion and jewelry despite the surge in prices.
Sai Gon Tiep Thi said, quoting an industry source, gold exports were worth nearly $1 billion last month.
Domestic gold is traded at VND1 million a tael lower than international prices.
Gold for immediate delivery dropped as much as $11.36, or 1.1 percent, to $981.54 and traded at $985.92 as of 10:40 a.m. in London. Gold futures for April delivery fell $14, or 1.4 percent, to $988.20 an ounce on the New York Mercantile Exchange’s Comex division. Both contracts climbed above $1,000 an ounce February 20.
Gold fell in London as equities rose and investors locked in gains after the metal climbed above $1,000 an ounce last week for the first time in almost a year, according to Bloomberg.
Stocks in Asia and Europe rallied, pushing the MSCI World Index higher for the first time in 10 days, on speculation the US government will increase its control over Citigroup Inc.
“Gold is consolidating because of stronger equity markets, but another race above $1,000 and a test of the record high from last March is still very likely,” Carsten Fritsch, a Frankfurt -based commodity analyst at Commerzbank AG, said.
“If equities turn lower again, gold will see another test of $1,000 and also of the record high from last year,” Fritsch said.
Hoang Uy
Bloomberg
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