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Price stability makes people keep indifferent to the dollar and gold
The gold price has been stable around the 44.8 million dong per tael in recent days. Meanwhile, the interbank dong/dollar exchange rate has been unchanged for the last nine weeks.
The gold price went up and down at some moments, but it has not bounce back to regain the record threshold of 45 million dong per tael. People might think that once the gold price dropped to below 45 million dong, people would rush to buy gold to hoard. However, in fact, the stable price has made people keep indifferent to gold.
At 9.15 am of March 2, Phu Quy Gold Company in Hanoi quoted the SJC gold prices at 44.65-44.82 million dong per tael (buy and sale prices). In HCM City, the Saigon Jewelry Company SJC at the same time quoted the SJC prices at 44.65 and 44.8 million dong per tael, respectively.
The gold price has got stabilized again, which has promoted goldsmith companies to narrow the gap between the buy and sale prices to 150,000 dong per tael from 300-400,000 dong.
The market keeps calm amid the gold price decreases which can be seen in the low trading volume at big goldsmith companies. SJC said that on March 1, the company bought only 700 taels and sold 800 taels. Meanwhile, on bustling days the trading volume could be 5000-10,000 taels.
“The daily trading volume hovers just around 1000 taels. The market keeps quiet and people do not show demand,” said Nguyen Cong Tuong, a senior officer of SJC.
The shops on the gold street Tran Nhan Tong in Hanoi also reported that the demand is not high at this moment.
Explaining this, Tuong said that the dong may be in short supply now, while the gold prices keep stable and investors still cannot foresee the gold price prospects.
Thoi bao Kinh te Vietnam has cited its sources as saying that the gold price in the world market is now at 43.25 million dong per tael, lower by 1.6 million dong than the SJC retail price. The gap between the domestic and the world prices has been extended slightly as the domestic gold price has been decreasing more slowly than the world price. Prior to that, the domestic price was higher by 500,000-700,000 dong per tael.
International analysts have reported that investors have begun collecting gold again, but with cautious steps after they bargained away on February 29.
Meanwhile, the dollar price has been stable for the last nine weeks. The dollar price announced by the State Bank was 20,828 dong per dollar late last week, the same level in the last nine weeks.
The exchange rate of 20,828 dong per dollar was first announced on December 24, 2011, which was 15 dong per dollar higher than the previous level at 20,813 dong per dollar.
In the past, people rarely witnessed the dong/dollar exchange rate staying unchanged for two months. Prior to that, the dong/dollar exchange rate once stayed unchanged for seven weeks, from October 1, 2011, to December 13, 2011. Meanwhile, in the first months of 2011, the dollar price could be stable within two weeks at maximum.
Dr Nguyen Minh Phong from the Hanoi Socio-Economic Research Institute said on Dat Viet, that the stabilization of the dollar should be seen as a good sign for the foreign currency market, which shows that the State Bank is following a reasonable policy in managing the market.
However, Phuong also said that the State Bank would have to think very carefully if it wants to adjust the exchange rate at this moment. After the sharp devaluation of the dong in early 2011, when the State Bank raised the dollar price from 18,932 dong per dollar to 20,693 dong per dollar, the central bank should keep cautious with any further adjustment moves.
vietnamnet
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