Local gold price hits seven-year peak amid trade tensions

09:39 | 27/08/2019
Gold is showing its mettle as a safe haven asset as bullion prices continued to hit new peaks on both domestic and global markets.
local gold price hits seven year peak amid trade tensions
Gold products of Sai Gon Jewelry Joint Stock Company (SJC). Domestic gold prices hit a seven-year peak amid trade tensions.-Photo sjc.com.vn

Gold is striding toward US$1,600 an ounce on global markets as the US-China trade war is worsening, boosting demand for traditional safe-haven assets.

Bullion futures rallied 1.8 per cent to hit $1,555 an ounce on the Comex on Monday morning, the highest since 2013, but gradually decreased in the afternoon to $1,540 at 2.50pm (local time).

Spot prices also declined from the day high of $1,555 per ounce to $1,529 in the afternoon.

Prices of the yellow metal have surged more than 20 per cent this year as Washington and Beijing have squared off.

In the domestic market, gold prices extended last week’s gains and climbed more than VND43 million ($1,848) per tael, or 1.2 ounces, on Monday after global gold prices hit a six-year peak.

This is the first time the domestic gold price has reached VND43 million per tael since August 2012.

In the morning trade, most gold firms increased their selling prices to VND43 million per tael or higher. Sai Gon Jewelry Joint Stock Company (SJC) quoted their buying/selling prices of VND42.6 million and VND43 million, up VND500,000 and VND600,000 per tael compared to last week, respectively.

SJC gold – the national gold brand – quoted by other businesses including Bao Tin Minh Chau Jewellery and Gemstone, Doji and Phu Quy were between VND42.2 million to VND42.6 million for buying, and VND43 million and VND43.2 million for selling, up VND500,000-VND600,000 per tael.

The prices dropped slightly in the afternoon following the slowdown in the global markets.

SJC decreased their selling price to VND42.77 million per tael while prices quoted by Bao Tin Minh Chau Jewellery and Gemstone, Doji and Phu Quy were between VND42.80 million and VND42.85 million per tael.

The difference between the heat this year and seven years ago is that gold price in 2012 was about VND2 million higher than the world price, but at present, the domestic and world gold price is nearly equal.

Experts have predicted gold will continue to soar as investors seek havens from trade tensions and further Fed easing.

“Upside target [is] $1,576 [an ounce for gold] I think in this move, and then if this thing really gets going, that green arrow would point you to $1,708,” Todd Gordon, a gold price analyst at TradingAnalysis, told Kitco News.

The stock market went on a roller coaster ride after US President Donald Trump threatened retaliation tariffs on China. Observers have feared that the escalation in the US-China trade war will hurt the outlook for global growth.

The State Bank of Viet Nam decreased its benchmark rate to VND23,114 per US dollar, down VND13 from Friday. The USD/VND exchange rate has been stable in recent days, with the buying/selling price of one US dollar at Vietcombank is VND23,150/VND23,270.

VNA

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