Vietnam Daily News

December 15: Vietnam gold drops to 43.35m dong, US dollar stable

Written by Dailynews.vn Friday, 16 December 2011 17:45

Vietnam gold price this morning December 15 continued dropping to around 43.35 million dong a tael (1.2 ounces) against yesterday's closing price (44.04 million dong) as world gold fell around 3 percent last night. Local official dollar rate was kept at 20,813 dong.

By 9:30 a.m Hanoi time, Saigon Jewellery Company, the biggest gold firm in Vietnam, collected gold at 42.95 million dong and sold at 43.35 million dong a tael.

Sacombank Jewellery Company bought gold at 42.95 million dong and sold at 43.45 million dong a tael.

Rong Thang Long gold, a product of Bao Tin Minh Chau company, was traded at 42.00 million dong/tael and 42.45 million dong/tael for bid and ask, respectively.

Phu Nhuan Jewlery Company bought its branded gold so-called Phuong Hoang PNJ-DAB at 43.05 million dong and sold at 43.25 million dong a tael.

Hanoi-based Phu Quy Jewellery Company purchased SJC-brand gold at 43.00 million dong and sold at 43.45 million dong.

On the world market, gold dropped about 3 percent on last night, as a technical sell-off, end of the year fund liquidation, and plunging industrial commodities sent bullion to its second-worst rout since the 2008 economic crisis.

Bullion's losses snowballed after it broke below its 200-day moving average - a key technical support it had held for nearly three years.

Gold option volatility also exploded, as investors sought to hedge against downside risk in underlying futures. The magnitude of gold's decline dwarfed equities' losses. Bullion was already under selling pressure from the previous session due to a lack of new economic stimulus by the US Federal Reserve and persistent European debt fears.

Rampant market talk that possible liquidation by a big hedge fund to meet redemption demand ahead of the year end also weighed heavily on bullion market sentiment.

"It appears that there is significant amount of forced selling," said James Dailey, portfolio manager of the TEAM Financial Asset Management with $200 million in fund assets. "The way gold is falling it looks like a big fund is blowing up, prompting forced-redemption selling."

Spot gold settled around $1,574 an ounce, having earlier hit $1,564.29, its lowest since late September.

The metal is on track for its worst three-day slide since late September, also its second-largest sell-off since October of 2008.

US gold futures for February delivery were down over 5 percent at nearly $1,576 an ounce. Trading volume already surpassed its 30-day moving average, on track to be one of the busiest sessions in the last three months.

Spot gold broke below its 200-day moving average for the first time since January 2009, as some analysts said that a break below that defining parameter could spell the end of gold's three-year bull trend.

Vietnam's central bank kept the US dollar's exchange rate unchanged at 20,813 dong today after it suddenly raised the forex rate to all-time high in its history on Wednesday. The forex rate gained 185 dong per dollar, or 0.9 percent since October 5.

Vietcombank, Asia Commercial Bank, Eximbank and some other banks bought the dollar at between 21,000- 21,018 dong/US dollar and sold the greenback at 21,021 dong/US dollar.

This morning, US dollar on the free market stayed at around 21,200 dong (purchase) and 21,240 dong (sell).

Source: www.intellasia.net/news/articles/finance/111350963.shtml