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Roundup: Vietnam's gold price shaking in post-Brexit era

Xinhua, July 8, 2016 Adjust font size:

Vietnamese domestic price of gold has been fluctuating over the past three days due to psychological effects among investors following exit of Britain from the European Union (Brexit).

On Wednesday afternoon, selling price of gold at Saigon Jewelry Joint-Stock Company (SJC) in southern Ho Chi Minh City hit a peak of around 40 million Vietnamese dong (over 1,793 U.S. dollars) a tael, posting the highest price since September 2013.

At the opening hour of Friday morning, selling price of SJC gold plunged to hit 36.3 million Vietnamese dong (nearly 1,628 U.S. dollars) per tael.

Meanwhile, gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as the U.S. dollar strengthened and positive U.S. data was released.

The most active gold contract for August delivery fell 5 U.S. dollars, or 0.37 percent, to settle at 1,362.10 dollars per ounce.

"The reason for the hike in gold prices in recent days is the psychological impact following the Brexit vote," Nguyen Huu Canh, Head of Department of Foreign Exchange Management under the State Bank of Vietnam (SBV) was quoted by local Vietnam News, an edition of Vietnam's state-run news agency VNA as saying on Friday.

In addition, Canh said the delay of increasing interest rates by U.S. Federal Reserve (FED) also contributed to the hike of gold price.

Echoing Canh, Nguyen Thanh Truc, vice president of the Association of Gold Trading said that in the past days, Brexit impact and the crowd psychology of Vietnamese people have made the domestic gold price go up and down. He advised gold buyers to stay cautious as the market is hindering risks.

In the coming time, the SBV will monitor closely on market situation and stand ready to interfere in gold market if necessary, said Canh.

The local gold market calmed down Thursday after the central bank's announcement.

Experts forecast that gold price in Vietnam will continue fluctuation following international market, therefore, investors have been warned to stay cautious in gold trading.

Investors should avoid buying gold in the context of wide price gap between local and international market, local insiders said. Endit