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Gold plunges 5.0% on global fall
Domestic gold price yesterday fell by 5 per cent to VND44.4 million (US$2,130) per tael as global bullion prices declined by 7 per cent over the past two days, falling from its record of $1,917.9 per ounce.
Sai Gon Jewellery Co (SJC), Bao Tin Minh Chau, Agribank Gold and Jewellery Company (AJC), Sacombank Jewellery Company (SBJ), Phu Nhuan Jewellery Company (PNJ) and Doji quoted prices ranging from VND44.4 million to VND44.8 million per tael.
Bullion on the domestic market tumbled by more than 8 per cent or VND4 million in two days and dropped back from the record highs seen during the past two weeks.
"The fall in domestic gold prices resulted from the sharp decrease of global bullion and the central bank's permission to allow more gold imports on Tuesday," said Tran Quoc Quynh, a senior gold expert with the Viet Nam Gold Traders Association.
Yesterday, the Kitco gold price was at $1,707 per ounce. One tael is equivalent to 1.2 ounces.
Gold shops in Ha Noi and HCM City reported hectic trading yesterday when people flocked to purchase gold at falling prices. The total trading volume was estimated to increase 70 per cent against Wednesday and buying volumes outweighed selling.
Nguyen Van Binh, governor of the State Bank of Viet Nam, on Tuesday announced approval to allow more bullion imports if necessary to stabilise the overheated domestic gold market and keep prices stable.
The measure aimed to control the gap between domestic and global prices, somewhere under VND400,000 ($19.21) per tael, as a widening disparity between domestic and world prices encourages manipulation and speculation.
However, gold dealers yesterday kept the gap in prices at VND600,000 per tael.
Market observers suggested that the central bank should force gold importers to bring the price gap to about VND400,000, otherwise, the central bank should punish violations in gold trading. The measure was expected to keep domestic market prices in line with the global price.
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