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Phu Nhuan Jewellery JSC records a low volume of gold trading despite the gold price falls in the market. — Photo VNS
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HA NOI (Biz Hub) — Gold prices fell further in the Vietnamese market on Monday, with one tael, or 1.205 ounces, of state-owned SJC gold selling for VND34 million (US$1,557.1).
This was a drop of VND44,000 ($2) from the five-year low posted on June 25 this year.
On the global gold trading website Kitco.com, the price of gold slipped $7.5 per ounce. The site listed each tael at $1,155.3 or $1,392.1 per tael.
Reuters.com also said gold slipped on Monday, tracking a softer euro after a weekend emergency summit to address Greece's debt crisis yielded no deal. Signals that the US Federal Reserve was on track to raise interest rates this year also dragged down prices.
Lower price, but gold still not wanted
A jewellery trading stall near the Ben Thanh market in HCM City stopped trading gold earlier this year. The shop owner told the Saigon Economic Times that poor demand from local buyers made her gold business unprofitable. She now only trades in foreign currency.
Kim Phu Jewellery, one of the best known gold traders in the city, also exited the gold market recently.
The State-owned gold brand SJC has seen the price of a tael fall VND20,000-30,000 ($0.95-1.4) each day, representing a drop of more than 2 per cent since May.
Phu Nhuan Jewellery JSC said that though the selling/buying ratio was 70/30, the volume of gold trading was not high.
The Saigon Economic Times cited two reasons for the light trading in the precious metal: the gap between the domestic and international prices and the slow but steady fall in gold prices.
On July 13, the price of a tael of gold in Viet Nam was $165 higher than that on the world market.
Le Thi Phuong, a domestic help working at a place on Ngoc Ha Street, said she had collected 3.5 taels of gold in the last three years but had now decided to sell it as she did not want to lose more money. Phuong has lost more than VND10 million ($458) by keeping the gold. "I waited for the price to recover, but it kept going down," she said.
"I don't want to lose more," she added.
The Thoi Bao Ngan Hang (Banking Times) newspaper said that in one way, the State Bank of Viet Nam (SBV) had been successful in weaning people off the habit of hoarding gold.
In 2012, the SBV had issued Decree No. 24 to curb the uncontrolled local gold market, saying that before 2011, the gold market was volatile and that it put pressure on the currency market, balance of accounts, monetary policies and economic growth.
SBV Governor Nguyen Van Binh reported in May 2015 that the local gold market had remained stable in the past few years, although Viet Nam remains a gold importer and the Vietnamese have the habit of hoarding gold.
The central bank has signalled that it will continue adopting comprehensive measures to ensure the gold market remains stable. — VNS