Vietnam's gold prices keep falling

Vietnam's average gold price closed at 43.84 million Vietnamese dong (VND) (2,103 U.S. dollars) a tael, equivalent to 1.2 ounces on Friday, an increase of 150,000 VND (7. 1 U.S. dollars) over the previous trading day, but a decrease of 500,000 VND (23.9 U.S. dollars) against last week's closing session. In the capital Hanoi, the national SJC-branded gold was traded with buying price at 43.62 million VND (2,093 U.S. dollars) a tael on Friday and selling price at 43.84 million VND (2,103 U.S. dollars) a tael, an increase of 150,000 VND (7.1 U.S. dollars) against the previous day. Saigon Jewelry Joint-Stock Company in southern Ho Chi Minh City quoted buying price at the same, and selling price at 20,000 VND ( 90 U.S. cents) lower, than those in Hanoi. During the week, global spot gold price kept falling down at 1, 647 U.S. dollars per ounce on Friday, which influenced domestic gold price going down below 44 million VND (2,111 U.S. dollars) per tael. However, while global gold price lost more than 3 percent during the week, domestic gold price fell only 1 percent. This made the gap between them of over 2.5 million VND (almost 120 U.S. dollars) apart in favor of the domestic one, much higher than the goal of 400,000 VND (19.2 U.S. dollars) set by the State Bank of Vietnam (SBV). Insiders said global gold price declined to a lower average level in recent weeks partly due to the U.S. dollar got stronger in the basket of other currencies and a sign showing investors were trying to purchase more gold. But analysts said global gold price would soon rebound and might reach the level of 1,800 U.S. dollars per ounce in the second quarter of this year. Meanwhile, the VND weakened against the USD in the past few days due to new rules on the foreign currency positions of banks issued by SBV and a resulting increase in demand for the greenback. The change ended 30 days of stability in foreign exchange rates. Although the interbank exchange rate remained unchanged at 20, 828 VND per one U.S. dollar (since last Dec. 26), with a ceiling rate of VND 21,036, rates posted by commercial banks and on black market on Friday rose by 20-60 VND per dollar reaching 20,84020, 900 VND for one dollar buying/selling. At the beginning of the year, SBV Governor Nguyen Van Binh said that without any unexpected external shocks, SBV would be able to maintain a stable foreign exchange rate, with currency devaluation during the year of less than 3 percent. Last week, SBV decreased the ceiling interest rates of both lending and deposits by one percent and the move was applied by commercial banks and credit institutions.