Gold jumps, exchange rate, stocks decline due to Fed’s interest rate cut

The price of gold in Vietnam rose by VND500,000 per tael (1.2 ounces) compared to the previous day on March 4 as the global gold price jumped after the US Federal Reserve unexpectedly cut its benchmark interest rate by 0.5 percent to 1-1.25 percent to cope with increasing economic risks due to the Covid-19 epidemic.
Saigon Jewelry Company bought gold at VND46.3 million per tael and sold at VND46.97 million per tael at 4 p.m. in Ho Chi Minh City, down VND500,000 per tael compared to that in the morning but still up VND500,000 per tael in buying rate and VND550,000 per tael in selling rate compared to the previous day.

At the same time, Hanoi-based Bao Tin Minh Chau purchased gold at VND46.4 million per tael and sold at VND46.95 million per tael.

Domestic gold price surged as the global gold price continued to soar by US$45 an ounce to trade at $1,643 an ounce on March 4. Experts said that the Fed’s unexpected move prompted investors to pump money into the precious metal.

After conversion, the global price was at VND46.1 million per tael, VND1.4 million per tael lower than the domestic gold price. The gap between the global and domestic prices was more and more widened as domestic gold price always increases faster and declines more slowly than the global gold price.

While the bullion price increased sharply, the US dollar exchange rate against the Vietnamese dong dropped. The State Bank of Vietnam announced the reference exchange rate of the US dollar at VND23,204 per dollar, down VND5 per dollar compared to the previous day. At commercial banks, the US dollar exchange rate also declined by VND10-20 per dollar.

Vietnam’s stock market curbed a two-day winning streak on March 4 as foreign investors continued to net sell nearly VND480 billion in the market.

Particularly, the VN-Index slid 1.24 points, or 0.14 percent, to close at 889.37 points whereas the HNX-Index jumped 1.13 percent to finish at 113.85 points. The total trading volume reached 238.45 million shares, worth nearly VND3.88 trillion, up 12 percent in volume but down 2 percent in value compared to the previous trading session. Of which, put-through transactions contributed 43 million shares, worth more than VND1.22 trillion.

By Nhung Nguyen – Translated by Thuy Doan

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