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Gold market sees strong waves, exchange rate fluctuates, stocks tumble
The gold market has become burning after some peaceful days. The dong/dollar exchange rate has been fluctuating. Meanwhile, the stock prices have fallen dramatically as investors have been running away from the market.
Gold market: the purchasing power abnormally increases
Hanoians were so surprised when seeing the SJC gold price quoted at 8 am of August 22 increasing by 520,000 dong per tael over the closing price of the day before.
Just 20 minutes later, the gold price was raised once again to 43.6-43.75 million dong per tael, the highest peak since April 2012.
After that, the gold price continuously went up and down, forcing gold companies’ officers to change the posted prices regularly. An executive of Doji Group said he could not do anything on the morning of August 22, except the changing of the posted prices.
According to Nguyen Cong Tuong, a senior executive of the Saigon Jewelry Company SJC said the purchasing power was very high: SJC sold 3100 tales and bought 2800 taels on the day.
Huong, a housewife in Hanoi, said she has withdrawn 100 million dong from bank deposits to buy gold after she heard the news about the arrest of Nguyen Duc Kien, a mogul in the banking sector.
Like Huong, many other people have also decided to buy gold instead of making bank deposits, since they believe that the Kien arrest would shake the banking system.
Ton The Vinh Quyen, Business Director of Sacombank-SBJ, has confirmed that people rush to buy gold these days, while the supply is limited. As a result, gold companies have to widen the gap between the sale and purchase prices, thus making the gold price increase more sharply.
In general, gold companies set up the margin of 100,000 dong per tael. Meanwhile, the gap climbed to 170,000 dong per tael on August 22.
In Asia, the gold price with spot deliveries on the morning of August 22 stood at 1640.3 dollars per oz, or 41.4 million dong per tael. As such, the SJC gold in the domestic market is now 2.2 million dong per tael higher than the world price.
Analysts believe that 1640 dollar per oz is an important resistance threshold, and if the gold price breaks the line, the gold price would increase sharply.
Stock market witnesses temporary panic
The electronic boards at securities companies all lit red on August 22, showing the continued downward trend of the stock prices. The VN Index dropped further by 6.61 points, while the HNX Index lost 2.3 points.
Ngo Thanh Phat, Analysis Director of the Vietnam International Securities Company, has noted that bank shares have seen the prices fall sharply because of the big sale offers.
HSC, in its bulletin, said investors have been trying to sell stocks away amid the information about the arrest of Kien, one of the most influential portraits in the finance sector. However, while predicting that bank shares would still be sold more in the next trading sessions, HSC believes that investors would return to buy back bank shares.
Fiachra Mac Cana, a senior executive of HSC believes that the Kien arrest has just caused a temporary panic. The stock prices have decreased because of the wild guesses about the fate of Kien and the banks where Kien invests, not because of the quality of the stocks. Therefore, the bank shares would be a favorite again in the time to come, especially when the State Bank has affirmed that the banking system is still in good conditions.
vietnamnet
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