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Gold recovers over equity woes, inflation scare
Gold bounced back strongly Friday with heavy buying in Ho Chi Minh City.
The price at the Saigon Jewelry Joint Stock Co. rallied sharply after three days of slumps, surging by VND450,000 a tael to VND19.65 million, or US$937 per ounce.
“International prices are moving up over growing worries about plunging US stocks,” Huynh Trung Khanh, a Vietnamese consultant for the World Gold Council, said.
In London, bullion for immediate delivery climbed as much as $9.99, or 1.1 percent, to $942.40 an ounce before edging down to $939.25 at 11:27 a.m. local time.
April gold futures added $11.60, or 1.3 percent, to $939.40 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.
International prices are likely to be volatile but would not fall back to $900, Khanh said.
Tran Thanh Hai, general director of VGB Gold Exchange, said investors at gold exchanges should not keep open positions since prices are likely to be volatile next week.
Gold rose for a second day in London as plunging stock markets and concern about inflation prompted some investors to buy the metal as a refuge.
The Dow Jones Industrial Average in New York slid 4.1 percent on Thursday and has lost 20 percent, entering a bear market, since President Barack Obama took office.
Bullion, up 6.5 percent in 2009, may lead gains by commodities this year as investors seek an inflation hedge, Douglas Hepworth, research director at Gresham Investment Management LLC, said Thursday in Barcelona.
“US investors are heavily buying gold and will keep buying,” Bayram Dincer, a commodities analyst at Dresdner Bank in Zurich, said Friday by e-mail. The metal will end the year at around $1,200 an ounce, Dincer said, compared with the current record of $1,037.20 a year ago.
Thanh nien, Bloomberg
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