Monday, June 23, 2008

Gold prices climb higher in Vietnam

HCMC gold moves up above VND19 million per tael

The gold price increases at a gold shop in Ho Chi Minh City during a volatile day’s trading Thursday
The gold price in Ho Chi Minh City Thursday broke VND19 million (US$1,146) per tael, as the value of the precious metal on global markets also rose.

Gold at the Saigon Jewelry Joint Stock Company, the city’s biggest gold trader, rose VND300,000 to VND19.05 million ($1,190) per tael at Thursday’s close of trade.

In New York, gold rose to a one-week high on speculation that surging costs of raw materials will boost demand for the precious metal as a hedge against inflation.

Gold reached an all-time high of $1,033.90 an ounce on March 17 as corn, crude oil and other commodities soared to records this year.

Gold futures for August delivery gained $14.50, or 1.6 percent, to $908 an ounce at 9:29 a.m. on the Comex division of the New York Mercantile Exchange.

Earlier, the price reached $911, the highest for a most-active contract since June 9.

Silver futures for July delivery climbed 32 cents, or 1.9 percent, to $17.66 an ounce.

Before Thursday, the price had advanced 16 percent this year, while gold climbed 6.6 percent.

A firm US currency makes metals priced in dollars expensive for holders of other currencies, while gold is seen as a store of value during times of inflation.

The dollar rallied broadly on Thursday, benefiting as the Swiss National Bank’s decision to keep its interest rates on hold stalled the Swiss franc’s overnight advance.

Gold has climbed this week on a weaker dollar.

“Gold prices have been able to rally recently in large part because the US Federal Reserve and European Central Bank softened their anti-inflation rhetoric,” HSBC said in a note. “Thus reducing the prospect of imminent monetary policy tightening and allowing financial markets to re-evaluate the chances of a US rate rise.”

Oil steadied on Thursday, supported by a further production outage in Nigeria and as a top US investment bank raised its oil price forecast.

US crude CLc1 was down 1.07 cents to $135.61 a barrel.

Meanwhile, the Kim Hoan Viet gold shop in HCMC’s District 1 was more crowded than usual Thursday.

The shop owner told Thanh Nien most visitors were there to sell.

Phu Nhuan Jewelry Joint Stock Company Deputy General Director Nguyen Thi Cuc said many people, in contrast, visited her firm’s shops to buy on the expectation that the price will move up further.

The Vietnam Association of Gold Trading Deputy Chairman Huynh Trung Khanh said the precious metal price was volatile.

Gold would reach $1,000 per ounce in the second half of this year because of growing demand, Khanh predicted.