Gold bullion prices in Vietnam still head north, US dollar strengthens

Prices of SJC-branded gold bars have been revised up continuously on Thursday, reaching a record high in the early afternoon, while the U.S. dollar gained against the Vietnamese dong.

State-owned Saigon Jewelry and Germ Stone Co. (SJC) quoted the precious metal at VND86.8-89.1 million ($3,412-3,502) a tael for bids and asks, respectively, up VND1.6 million from Wednesday.

DOJI, another major gold trader, offered pure gold at VND86.4-87.9 million ($3,396-3,455) a tael. A tael is equivalent to 37.5 grams.

Meanwhile, the global spot gold price increased $7 from early Thursday to $2,316 an ounce.

As such, the spread between Vietnam’s and global prices has widened to VND17.7 million ($697.7) a tael.

Despite a gold price hike, local companies and banks have shown lacklustre interest in the State Bank of Vietnam's (SBV) gold auctions.

At the Wednesday auction, the fifth since the SBV resumed gold sales last month after an 11-year hiatus, three bidders bought 3,400 taels, or one fifth of the volume on offer, at VND86.05 million ($3,382.5) a tael.

The central bank has so far sold 6,800 taels out of the 84,000 taels put up for auction. Industry insiders and experts have attributed the low interest to high floor prices set by the banking regulator, which pose high risks to buyers.

As a pattern, prices of gold bullion have gone up after every SBV gold auction. Compared to the first auction on April 23, the price of SJC gold has risen VND5 million ($196.5) a tael, expanding the price disparity.

On the forex front, the SBV raised its reference USD/VND rate by VND16 to VND24,265 a dollar. Following suit, Vietcombank raised its quoted rate by VND16 to VND25,148-25,478 for buying and selling.

On the free market, the greenback is being offered at VND25,650-25,730, down VND50-40 from Wednesday, respectively.