VietNamNet Bridge – The local gold market experienced a day of ups and downs on November 11 when the gold price hit 29 million dong a tael at 12 o’clock, the highest ever in history.

Bao Tin Minh Chau gold store this noon.

At 11.57am today, companies listed gold price at up to 29.20 million/tael, at least 200,000 dong higher than the price of 15 minutes earlier. Bao Tin Minh Chau, a prestigious gold trader in Hanoi, announced the buying and selling prices of gold at 28.5-29.25 million per tael at 12.44am but didn’t have enough gold for sales.

“The market has gone crazy. Group of speculators are blowing up the prices,” Nguyen Thanh Truc, the general director of Agribank Gold Company, a subsidiary of the Bank for Agriculture and Rural Development told VNExpress at 11.30am.

Several minutes ago, the Saigon Gold and Jewelry Company announced the price of over 29 million dong per tael for the Hanoi market. Other firms also raised prices. Truc said Agribank Gold Company launched a large volume of gold branded AAA to the market and tried to hold down the price at the lower level of 28.4 million per tael but the move couldn’t save the market.

Truc said that it was too costly to buy gold at 28 million dong per tael and that price was unimaginable. According to his calculation, the price for a tael of imported gold would be less than 26 million dong per tael, nearly 3 million dong per tael lower than the price in Vietnam.

“It is very bad to buy gold at this moment. If I had gold, I would sell it,” Truc said.

As the vice chairman of the Vietnam Gold Business Association, he said key gold traders must calm down and stabilise the market together.

Another vice chairman of the gold business association, Do Minh Phu, who is also chairman of the DOJI gold and jewelry group, agreed with Truc but said that even if they worked together they couldn’t deal with the current situation because gold traders couldn’t balance the supply and demand of gold.

SJC Hanoi, a member of DOJI system, stopped selling gold at 11am, November 11 because it couldn’t buy in gold from any source. Phu said that when the gold market was tense, gold traders often bought and sold gold in the system to support each other’s but none of them had gold to sell now.

“We aren’t even buying gold at this moment. In this situation, we will have to buy gold at high prices and then sell to the people at higher prices. It is so dangerous,” Phu said.

He said the gold market was losing its direction because of speculation. Phu said his company would buy gold when the market cools down.

A representative of Bao Tin Minh Chau said that many gold traders didn’t have gold for sales they had to complete yesterday.

Though the “fever” for gold is centred in Hanoi gold prices in HCM City quickly increased because traders in the north bought gold from the south.

As people flocked to goldsmith’s stores to buy gold they didn’t want to sell because they are concerned the dong could be devalued.

Phu has repeatedly exchanged information with the State Bank of Vietnam vabout the gold market. He said that the only effective measure at this time is finding new sources to supply the market.

To prevent investors from withdrawing gold from banks to sell, gold trading floors have raised the fees for withdrawing gold, up to 5.3 million dong per tael at some place, nearly 2 million dong higher than the fee listed in the morning.

However, in the early afternoon, the gold price fell by 2 million a tael. After a time of fluctuating  prices, at 2pm, Phu Quy gold in Hanoi had prices listed at 26.80-27.80 million dong per a tael (buying and selling prices).

However, Phu Quy’s representative said this would not be the last price. “The price will fall down further in several minutes,” he said.

At 1.30pm, Bao Tin Minh Chau slashed the prices by 200,000 dong per tael compared to the morning, at 28.40 – 29 million dong per tael.

By 2.48pm, November 11, Sacombank SBJ had changed its listed prices 29 time. It fixed at 26.75-27.65 million dong per tael compared to 28.65-29.30 million dong at the peak at 1pm.

Witnessing the behaviour of Hanoians as they flocked to buy gold when the prices were high, many gold traders called on people to sell.

In HCM City, the price for gold also reduced sharply in the afternoon, by 2 million dong per tael. Gold traders didn’t know what was happening to the gold market. Many gold stores in HCM City didn’t want to update prices.

In this situation, the State Bank of Vietnam’s governor Nguyen Van Giau stated this afternoon that a number of companies would be allowed to import gold without limit.

To curb trade deficits and save foreign currencies for importing essential goods, since June 2008, the State Bank of Vietnam has granted no more quotas for gold.

Since then, gold prices in Vietnam have remained higher than world prices – reaching a gap of 3.4 to 4 million dong per tael this morning.

VietNamNet/VNE 

Please send us your comments and feedback: