Vietnam gold market untouched by world price movements

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A fall in the international gold price last week failed to have any impact on prices of the metal in Vietnam, where market activity remains weak, experts said.

Gold prices dropped 3.7 percent last week, the most since Decemeber 16, while the dollar gained 1.3 percent, according to Bloomberg.

In Vietnam, the metal has continued to trade at a premium to the international price, with a gap of around VND2.3 million per tael, or VND1.9 million (US$910) an ounce.

"Local prices tend to change much more slowly compared to international prices," said Nguyen Cong Tuong, a sales manager at Saigon Jewelry Company Ltd., Vietnam's largest gold trader. "Prices (in Vietnam) are not falling because nobody is actually buying or selling."

Nguyen Ngoc Que Chi, general director of Sacombank Jewelry Limited Company, said even though activity was weak in the market, it's unsual to see a large gap of more than VND2 million per tael between local and global prices.

It shows that the local market is not following world trends at all and is not driven by supply and demand either, Chi said. It also means it is now difficult to make any forecast for prices, she added.

But Chi also said that the central bank's decision to cut the maximum interest rate on dong deposits to 13 percent from 14 percent could make more money flow into the stock and gold markets.

Vietnamese people always want to hoard gold so they will begin to buy again once they see prices are low, she said.

Gold has risen for 11 consecutive years. Bloomberg on Thursday cited Randgold Resources Ltd., a miner of the precious metal in Africa, as saying tthere would be increased volatility in gold prices this year, with the metal moving in a range from $1,500 to $2,000 an ounce.

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