Gold declines amid profit taking

The price of gold in Vietnam fell by VND80,000 a tael (1.2 ounces) May 19, as global prices dropped sharply due to recent rallies that spurred high sales among investors.

At most gold shops, the precious metal was bought at VND27.8 million a tael and sold at VND27.85 million, the lowest level within the past week.

Domestic gold prices slid by VND350,000 a tael over the last two days.

According to gold traders, trading was meager, as low prices had weakened investors’ selling demand, while the market saw limited investor buying.

The US dollar exchange rate on free market remained at VND18,970 for buying and VND19,000 for selling.

The greenback’s selling price at some commercial bank slid faintly. State-owned Vietcombank bought at VND18,960 and sold at VND19,010, down VND10 per dollar from the previous day.

Globally, bullion prices dropped, trading near the lowest level in a week, as recent increases prompted many investors sell for large profits.

Gold for immediate delivery slid US$1.1 per ounce to close at $1,224 on the New York Mercantile Exchange. Earlier, the price had fallen as low as $1,207 per ounce.

The downwards momentum extended to trading sessions on the Asian market this morning, as investors took advantage to realize profits. Spot gold on the Kitco gold chart closed at $1,214.6, down $9.4 from the closing price in New York as of 10 AM, Vietnamese time.

The Bloomberg Corporation quoted Park Jong Beom, a trader with Tongyang Futures Co. in Seoul, as saying that some investors were taking profits on recent gains, which was exerting a moderate pressure on the gold market.

However, analysts still show optimism regarding gold amid the debt crisis, which is likely to spread across Europe.

“Psychologically, gold still remains attractive as European fiscal woes have yet to ease,” Park said.

Holdings at SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, remained at an all-time high of 1,217.1 metric tons.

The euro exchange rate against the greenback slid to $1.21 a euro from $1.23 yesterday, a four-year low.

Concern over the European fiscal crisis and the debasement of the shared currency sank crude oil to the lowest level within seven months.

Crude oil futures for June settlement gave up $0.67 a barrel to $69.11 a barrel, the lowest level since September 29, 2009.

Compiled by Thuy Doan

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