Tuesday’s world gold price was nearly US$10 per troy ounce below that of a month ago despite a surge in crude oil prices. Unlike the world gold price, the domestic price gained by VND30,000 to close at VND18.10 million per tael (US$1,126). Why does the domestic gold price increase while the world price decreases?
Crude oil prices set a new record. A barrel of crude rose to US$117.76, an increase of US$17 compared to the same period the previous month. The world gold price, instead of following the path of oil prices, still hovers at US$915.80, nearly US$10 below what it was a month ago.
Despite the lower world gold price, the domestic price rose as a Saigon Jewelry Company one-tael ingot went up by VND30,000 to close at VND18.10 million.
Analysts blamed the rise in the domestic gold price and the increased demand for SJC gold on the fact that many investors have decided to shift to gold due to the current slump in the stock market. Since the beginning of the year, more than 1 million taels of SJC gold, equivalent to 40 million tonnes, were reportedly sold. The total volume of gold traded on the market was 11 million taels.
Another reason for the hike in the domestic gold price is that gold entrepreneurs have had to buy U.S. dollars at higher prices on the black markets to import gold, resulting in higher costs.
Analysts predicted that the domestic gold price will continue to rise due to the fact that a number of gold companies, securities companies and banks including SJC, Ha Thanh Securities, SJC Securities and Eximbank, Sacombank, and Intergold Company are establishing gold trading floors, which will attract a larger volume of transactions and a wider variety of ingots.
Aside from the popular ingots produced by SJC and PNJ, others brands include ACB and PNJ-DABank.