Gold in Vietnam Friday rose for the third day in a row, following an increase in international prices of the yellow metal on Thursday as well as news that several domestic banks have been approved to export gold.
The precious metal’s price at the Saigon Jewelry Joint Stock Co., the country’s biggest gold trader, jumped VND70,000 to VND18.83 million (US$1,076) a tael, or $897 an ounce. A tael is equal to 1.2 ounces.
A senior official from a Ho Chi Minh City-based jewelry maker, who asked not to be named, told Thanh Nien Daily that domestic gold price has moved up recently after some domestic banks received approval to export gold. He did not disclose the name of the banks.
“Domestic gold price rose on the back of a rally in international price,” said Huynh Trung Khanh, a Vietnamese consultant to the World Gold Council, adding that speculation the global recession will boost demand for precious metals as a store of value was also a factor.
He also predicted that domestic gold prices will remain on its upward trend as they are still lower than the international price.
International moves
Gold on Thursday rose for a second day in London on speculation that government spending will spur inflation and the dollar will weaken, boosting demand for the metal as a hedge and an alternative investment, according to Bloomberg.
Bullion for immediate delivery rose as much as $11.93, or 1.3 percent, to $917.68 an ounce and traded at $916.57 at 11:21 a.m. on Thursday in London. April futures added $16.30, or 1.8 percent, to $918.50 in electronic trading on the Comex division of the New York Mercantile Exchange.
But the precious metal inched down Friday as speculators booked profits from gains in New York, while record high exchange-traded fund holdings underlined strong investor interest amid continuing turmoil in the financial sector, according to Reuters.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust GLD, said holdings rose 7.7 tons to another record of 867.19 tons on February 5 - the third increase this week.
Gold was trading at $913.30 an ounce, down $0.45 from New York's notional close on Thursday, when it hit a session high of $924, not far from last week's near four-month high of $930.40 and within sight of a record of $1,030.80 hit last March.
"In short, gold is heading much higher, but not without more struggle and occasional disappointment for those looking for a speedy ascent," said Jeffrey Nichols, managing director of American Precious Metals Advisors.
"Further out, over the next year or two, I have no doubt that gold will move to new historic highs well above the $1,030 level touched a year ago in March."
Gold has rebounded more than 30 percent since tumbling to a 13-month low of $680.80 in late October, driven by a recovery in oil prices and steady investment demand, but profit taking capped gains and purchases from the jewelry sector also slowed.
Gold imports by India, the world's main consumer, plunged more than 90 percent to just 1.2 tons in January 2009, from 18 tons in the same month last year, due to high prices and ample stocks, the Bombay Bullion Association said.
But Nichols said buyers in India could eventually adjust to the high prices, which could spur a partial recovery in demand.
Dealers said gold's recent rally was supported by an increase of overall allocation from investment portfolios in the yellow metal, whose appeal as an alternative investment has been boosted by volatile stock markets and fears of global economic recession.
Economic news was bleak on both sides of the Atlantic on Thursday as German manufacturing suffered its biggest decline since 1990 and applications for US jobless benefits soared to a 26-year high.
