Gold prices soar to eight-year high

Tuesday, Feb 25, 2020 08:11

Customers in a gold shop. Domestic gold prices soared to VNĐ49.4 million (US$2,128.66) per tael on Monday. — Photo

Domestic gold prices soared to an eight-year high on Monday, reaching VND49.4 million (US$2,128.66) per tael ($1,766.4 per ounce).

That level was last surpassed in September 2011, when prices reached VND49.3 million per tael.

Bao Tin Minh Chau gold firm listed an increase of about VND4 million from last Friday afternoon.

Doji reported prices of VND49.2 million, while Sai Gon Jewellery Company (SJC) posted VND49 million per tael.

Smaller shops were asking for VND50 million.

On the global gold exchange Kitco, after passing a seven-year high, prices rose 2 per cent to $1,682.7 per ounce ($2,027 per tael) the same day.

Michael McCarthy, chief market strategist at CMC Market, told Reuters: “The thinking is that fewer people are holding shares, selling down in particular, and that money has to fall into havens.”

On the local market, a tael of gold on Monday was $100 more than global prices, and websites of most gold firms were overloaded.

Bao Tin Minh Chau recorded a surge in transactions on Monday with 55 per cent buyers and 45 per cent sellers. The firm said on its website it was a good time for investors to trade gold to make a profit.

Disagreeing, Phan Dung Khanh, investment director of Maybank Kim Eng Securities, told Viet Nam News it was not a good time to sell gold or speculate in the precious metal.

Khanh said prices also rose two years ago when cash was diverted from the declining Bitcoin to gold. He said COVID-19 and China-US tensions had added to the sharp increase, and said global prices could reach $2.000 per ounce ($2,410 per tael) this year.

“Investors must be extremely cautious if they buy gold now,” Khanh said.

“Normally the gap between selling and buying is VND500,000-700,000, but today it reached more than VND1 million. Prices could fluctuate a lot,” he added.

On the State Bank of Viet Nam (SBV)'s website, there were no announcements regarding the management of gold prices.

“SBV does not need to make an announcement because Decree 24 on gold price management issued in 2012 had done a great job stabilising the local forex market and gold prices,” Khanh said.

“Gold demand in Viet Nam was now lower than in global markets,” he said, adding that people had stopped hoarding gold.

“However, at these prices, investors are unsure which way to turn.’ — VNS

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