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The impressive figures of the gold market in 2010
2010 was a year with many “storms” in the gold market. Local newspapers have summarized the most outstanding figures.
1. The record price – 38.2 million dong per tael
The domestic gold price climbed to a record high of 38.2 million dong per tael on November 9. The same scenario of last year was repeated in November: the gold price increased by several million dong per tael just within a morning. The gold price prompted people to rush to purchase gold, while enterprises said they did not have gold to sell. As a result, the domestic gold price jumped to 2 million dong per tael higher than the world’s price at the same time.
Among the several reasons cited to explain the wave of increases in the gold price, are the increase in the dollar price in the black market and the supply-demand imbalance. In addition, the State Bank of Vietnam blamed the price escalation on speculation.
The domestic price on December 8, 2010 decreased to less than 36 million dong per tael after many efforts by government agencies to stabilize the market.
2. The record loss of 2.4 million dong per tael
Believing that the gold price would maintain an upward trend, a lot of people rushed to buy gold, planning to sell gold later, when the price rose. However, they were mistaken. People who purchased gold when the price was at a high peak of 38 million dong per tael, and sold gold on December 22, incurred a loss of 2.2-2.4 million dong per tael.
The gold price in the second half of November and December has fluctuated unexpectedly, but the price has not climbed back to the 37-38 million dong per tael threshold. Therefore, gold investors who bought gold at high prices may not have the opportunities to recover their investment capital.
3. The price increases of 26 percent and 46 percent
From the end of 2009 to December 21, the world’s price increased 26 percent, and at the same time the domestic gold price increased 46 percent. The S&P 500 Index increased by 12.5 percent during that time, while the VN Index of Vietnam’s stock market decreased by 2.7 percent. Not only in Vietnam, but also in the world market, gold remains a profitable investment channel.
The world’s gold price increased considerably in the world market in 2010 because of many reasons which include the monetary policies of developed economies which prompt investors to seek more profitable investment channels, the public debt crisis which struck down some economies in Europe, and worries about high inflation rates in newly emerging economies. 2010 is the 10th consecutive year that witnessed increases in the price of gold price in the world market.
The noteworthy thing is that the domestic gold price has increased more sharply than the world’s price. This is due to the fact that the domestic price has been supported by the escalation of the dollar price. The dollar price has increased from 19,200 dong per dollar in late 2009 to 21,000 dong.
4. The controversial figure of 1000 tons of gold
In November local newspapers quoting the World Gold Council reported that about 1000 tons of gold is being kept among people. This means that every 8.6 Vietnamese people are keeping one kilos of gold, or 26.7 taels, or every Vietnamese person is keeping three taels of gold.
However, when asked about the volume of gold, Governor of the State Bank of Vietnam Nguyen Van Giau, said that he cannot understand where the figure comes from, adding that if the figure is true, then “Vietnamese people are too rich”.
According to the General Department of Customs, from 1998 to September 2010, Vietnam imported 339.86 tons of gold and exported 268.86 tons.
5. Five measures to cool down gold market
The central bank decided to tighten gold mobilization and lending, granted quotas to import gold to key enterprises, intervened to stabilize the dollar price, reduced the gold import tariff from one to zero percent and raised the export tariff from zero to 10 percent.
After the drastic measures were applied, the gold market has become more stabilized, now hovering around 36 million dong per tael. However, the domestic price is still 500,000 dong per tael higher than the world price.
vietnamnet
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