Gold falls to two-month low
Source: 08-AUG-2008 Intellasia | Thanhniennews
Aug 8, 2008 - 7:00:00 AM The price of the precious metal at Saigon Jewellery Joint Stock Co, HCM City's biggest gold trader known as SJC, fell by 190,000 dong (US$11.50) to 17.98 million dong (US$1,084) per tael. SJC's gold price has dropped 670,000 dong (US$40.40) per tael in just two days. A tael is 37.5 grams.

The plunge in the gold price triggered a surge in trading on the Saigon Gold Exchange.

Wednesday, 339,550 taels worth six trillion dong (US$362 million) was traded, compared with an average of 200,000 taels a day traded last week.

Global gold, meanwhile, rose 1% in Europe Wednesday as investors took advantage of a three-day fall in prices to buy below the key US$900 an ounce support level.

Gold rose to US$883.80/884.80 an ounce at 10:14 GMT from US$876.35/877.95 late in New York on Tuesday.

"Clearly there is some opportunistic buying going on at the moment," said Daniel Hynes, metals strategist at Merrill Lynch.

"We have seen numerous times over the past six months that US$900 an ounce is a key support level and whenever gold has fallen below that it has recovered relatively quickly."

Buying and selling by foreign investment companies followed the pattern described by Hynes, said Huynh Trung Khanh, a consultant for the Vietnam chapter of World Gold Council.

"For example, when the gold price reaches US$920 per ounce, investment companies will sell gold heavily to push the price down," he said.

"They will buy heavily when gold falls to US$870 an ounce."

Khanh forecast global gold prices were likely to fall to US$850-$860 per ounce and the domestic price was likely to drop to 17 million dong (US$1,025) per tael in the next quarter.

"Domestic gold may move up in October and November, which is the wedding season and at Christmas, due to growing demand," Khanh said.

"I also think the international price is likely to reach US$1,000 per ounce at the end of this year."

Vietnam imported around 66 tonnes of gold in the first six months of the year.

Analysts said it would take time to consume that amount.

Nearly 20 tonnes of gold are traded in Vietnam every day, compared with 2,000 tonnes a day around the world.