Selling prices of spot gold on the domestic market declined on Tuesday to VND43.62 million-44.02 million per tael, down from four-month highs reached at the start of the week. – Photo baochinhphu.vn
Gold prices declined on Tuesday after touching a four-month high, but the uptrend is unlikely to stop.
Buying prices at local gold and jewellery firms stood at VND43.62-43.68 million per tael (VND32.71 million-32.76 million for an ounce), and selling prices had reached VND43.82-44.02 per tael.
On Monday, buying and selling prices were hit four-month highs at around VND43.90 million (US$1,890) and VND44.45 million per tael to buy and sell.
International gold prices edged down on Tuesday after hitting seven-year highs the previous day.
Spot gold futures inched down 0.03 per cent to trade at $1,565.25 per ounce.
Spot gold has jumped 3.2 per cent in the last seven days as investors and traders around the globe worry about tensions between the US and Iran after a US drone killed a top Iranian military official on January 2.
Both sides have responded with aggressive rhetoric, raising concerns of further instability in the Middle East.
This could well boost gold prices further as investors look for a safe haven amid geopolitical tensions and a gloomy global economic outlook.
Spot gold futures have gained 22.3 per cent since the end of May 2019.
According to analyst Tran Thanh Hai, gold prices had become unpredictable and traders and investors were unsure whether they could move up to $1,700 per ounce in the near future.
“The uncertainty of global developments could lift local gold prices above VND45 million per tael,” Hai told Nguoi Lao Dong (The Labourers) newspaper.
In addition, high demand for gold products during Tet (Lunar New Year) was a driving factor behind the rising gold prices, he said.
If gold prices only fluctuated between VND2 million and VND3 million per tael, people would not be interested, he said.
But if gold prices moved up by VND4-5 million per tael, demand for gold products would increase significantly, he warned.
Trading volume had remained relatively stable in recent days despite big price moves, Nguyen Hoang Minh, deputy governor of the State Bank of Vietnam (SBV) branch in HCM City, said.
The SBV was closely watching the development of gold prices and would have an response to any big changes, Minh said.
New circular on gold trading
The SBV has issued Circular 29/2019/TT-NHNN to amend Circular 16/2012/TT-NHNN instructing the implementation of Government Decree 24/2012/ND-CP on gold trading.
Under the new circular, gold trading businesses will have to submit documents to the SBV to recognise changes to its business licence. The applications must be completed within 30 days from the date the company decides to change its business portfolio.
Gold trading businesses are allowed to make changes to the gold shops they use, and send quarterly reports to the SBV and its local offices.
The circular will take effect on February 12, 2020. – VNS