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Gold prices rise higher as traders keep low profile
Domestic gold trading is stagnating despite consecutive records hit in the price of the precious metal.
The gold price is listed about VND21.5 million (US$1,209) per tael (a tael is equivalent to 1.2 ounce) at gold shops. Bao Tin Minh Chau Jewellery and Sai Gon Jewellery Holding listed the buying and selling prices about VND21.43-24.54 million per tael, up about VND200,000 against Tuesday.
However, gold shop owners said the trade was easing with sales of only hundreds of tael recently, in comparison with thousands of tael during the previous price hike.
"Most clients have come here to sell a small amount, while very few clients have made purchases. There is a freeze in the gold trade," said the owner of Bao Tin Minh Chau Jewellery Shop on Tran Nhan Tong street.
Luu Quang Dien, head of the Sai Gon Jewellery Holding's branch in Ha Noi, said the market trend with gold trade was 'wait-and-see'.
"Trade at the VND21.5 million level is minimal. Those who want to sell gold are waiting for a higher price, while buyers consider the high-priced investment too risky," Dien said.
In agreement with Dien, Nguyen Thanh Truc, deputy director of the Viet Nam Gold Trading Association, said that people currently holding gold were primarily those who wanted to save gold, not trade it, in the context of prolonged economic recession.
"The fluctuation of the domestic gold price depends on local needs and the global price because of the central bank's restriction on gold imports for preventing a trade deficit. This rule restricts gold import-export activities," Truc said.
As a result, the domestic price was climbing on the global price, to even higher levels, while domestic demand was scarce, Truc said. "This situation puts investors into higher risks when they inject money in gold."
On the New York Stock Exchange, the gold price is listed at around $982.70 per tael. According to gold analysts, the price for gold could reach $1,000 soon.
A local economist who wished to remain anonymous predicted that domestic gold trade would regain activity again when the price hit this level.
"Investors still want hot money and gold is still the best choice for constant earnings," the economist said. "But until the export-import activities are officially loosened, the gold trade will remain risky."
VietNamNet, Viet Nam News
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