Gold prices fluctuate unpredictably

Domestic gold prices fluctuated strongly on the morning of August 11. At 8am, gold prices jumped to VND46 million/tael, up VND1.6 million/tael compared to the end of August 10 after world gold prices increased by more than USD50/ounce (nearly VND1.3 million/tael) to a peak of USD1,820/ounce.

However, just a few minutes after opening, the domestic gold price could not stay at 46 million VND/tael due to weak purchasing power, while the supply in the market was abundant because today was also the day 5 tons of imported gold arrived in Vietnam.

At 8:30, the selling price of gold was 45.9 million VND/tael, the buying price was 45.3 million VND/tael. At 8:45, the selling price of gold dropped to 45.8 million VND/tael. Then, the gold price continued to plummet after the world gold price broke through the 1,800 USD/ounce mark, at one point it was only 1,780 USD/ounce. At 9:41, the selling price of gold was only 45 million VND/tael, the buying price was 44.4 million VND/tael.

At 11:30, the selling price of gold reversed the trend, increasing by 500,000 VND/tael to 45.5 million VND/tael, while the buying price also increased to 45 million VND/tael due to the world gold price recovering to 1,791 USD/ounce. At the end of the morning trading session, the selling price of gold was 45.3 million VND/tael, the buying price was 44.9 million VND/tael. At 12:00, the world gold price was 1,787.3 USD/ounce.

The difference between buying and selling prices has gradually narrowed to 400,000 VND/tael, while at the beginning of the day the difference was up to 600,000 VND/tael.

Due to the strong fluctuations in gold prices, private gold shops have different prices, especially between 9am and 10am. The difference in gold prices between gold shops can be as high as 200,000-300,000 VND/tael.

Gold prices are running "chaotically" but there are no buyers, even at large gold companies, very few retail customers come to trade.

Saigon Thuong Tin Bank Jewelry Company (SBJ) commented that after a week of turmoil, domestic gold prices tended to calm down on the morning of August 11, with buying and selling volumes also slower than the first days of the week. In general, gold prices fluctuated in harmony with world prices, without any deviation as in the past.

According to analysis reports, the world gold price increased to a new record due to strong buying power when the world gold price fell to nearly 1,740 USD/ounce in the trading session in New York, combined with instability in the world economy.

The US stock market yesterday once again panicked and fled the market as bad news about the possibility of the European debt crisis engulfing French banks and spilling over to the US financial sector, European stock markets were in a similar situation. This decline erased yesterday's rally after the US Federal Reserve's commitment to maintain low interest rates to restore the economy.

Investors flocked to gold as a safe haven despite the SPDR Gold Trust fund selling 13 tons for the first time in a long time and buying back, bringing its gold holdings to 1,296.898 tons.

In yesterday's currency advisory newsletter, Eximbank cited Commerzbank's forecast that gold prices would average $1,800 per ounce in the fourth quarter. Germany's leading bank also forecast that the average gold price in the third quarter of this year would be $1,700 per ounce, $200 higher than the previous forecast.

However, many warnings have been issued because the world gold price is at an excessively risky level. According to experts, gold has increased too much in recent times and investors may have to exit their gold positions to get money to cover losses in other markets. Once confidence is restored, the gold price will reverse as the market rushes into riskier assets such as stocks.

Eximbank’s currency advisory bulletin quoted Commerzbank’s assessment that gold prices will fall at various times. “This could happen, for example, if the margin rate on gold futures increases (which is very likely to happen when gold prices are volatile as they are now) causing financial speculators to increase their selling,” analysts said.

According to Tuoi Tre