Local gold prices made a sudden improvement yesterday to regain VND17.61 million (US$1,012) per tael in a surprise recovery of global gold prices, paring the week’s losses.

Gold advanced a second day in Asia after measures by the US government to stabilise its financial system boosted investor confidence, and on speculation that global interest rates will remain low.

Bullion for immediate delivery gained as much as 0.9 per cent to $824.93 an ounce, and traded at $820.82. A tael of gold equals 1.2 troy ounces.

The local price increased to VND17.61 million ($1,012) per tael, up VND200,000 per tael against Thursday on the Asia Commercial Bank’s Gold Trading Bourse yesterday.

In Ha Noi, PNJ-DAB gold leaf by Phu Nhuan Jewellery Co (PNJ) was offering buying-selling prices of VND17.49/17.55 million ($1,005-1,008) per tael, up by almost VND100,000 per tael against the previous day.

At Bao Tin Minh Chau Jewellery Co (BTMC), gold traded at about VND17.45/17.59 million ($1,002-1,010) per tael.

Some Ha Noi gold dealers reported the volume of buyers was two times higher than sellers. But trading business was not as busy as some expected.

In HCM City, gold shops on Phan Dinh Phung street traded gold at around VND17.44/17.55 million ($1,001-1,008) per tael. The Sai Gon Jewellery Co (SJC) listed the buying-selling price at VND17.45/17.55 million ($1,002-1,008) per tael, up by VND100,000 yesterday morning.

"Again, I must say that local gold prices are almost matching the upward trend of global gold prices," said BTMC staffer Nguyen Huu Dang.

Dollar up

On the street, the US dollar rose by 0.4 per cent against the dong to VND17,790 per dollar.

Shops assumed that, individuals finding it difficult to buy the dollar at banks would buy it on the street.

Some customers said that they just bought the dollar to store as they had some idle Vietnamese cash. Others believed that the dollar would regain their value as some powerful economies were getting bailouts.

The upwards trend on the street ran against trends on the official banking market. The State Bank of Viet Nam yesterday listed interbank’s rate at VND16,970 per dollar from VND16,972 on Thursday.

At commercial banks, a US dollar cost about VND17,479.

Commenting on US dollar value on banking market, some observers said that import demand often reduced a little right before the Lunar New Year festival. Demands for US dollar also decreased at this time.  (VNS)