Gold continues move backwards

The price of gold in Vietnam fell by VND200,000 a tael (1.2 ounces) over the previous day on June 11 as global prices declined, triggered by profit-taking and positive economic indicators.

Most gold shops bought gold at VND27.9 million a tael and sold it at VND27.95 million. Domestic gold prices dropped to below VND28 million last evening after the metal plunged on European markets.

Locally, gold fetched VND300,000 a tael lower than global price.

Trading on bullion market remained muted.

On foreign currency market, dollars were bought at VND18,980 and sold at VND19,000.

State-owned Vietcombank fixed their dollar exchange rate at VND18,950 for buying and VND19,000 for selling.

Internationally, bullion sank for the third straight day, seeing a much bigger loss than the two previous sessions.

According to analysts, there were two main reasons for the precious metal’s correction.

First, gold hit an all-time high of US$1,252.11 an ounce June 8, bolstering investors to sell holdings to book profits.

Second, international stock markets recovered over the past two days thanks to positive economic data from China, Japan, and New Zealand, showing that economic recovery was in line. Wall Street advanced 2.7 percent on last night trading session. Asian stocks also climbed 1.5 to 2 percent this morning.

Last night, gold for immediate delivery lost $15.4, or 1.3 percent, to $1.218.7 an ounce on the New York Mercantile Exchange. Earlier, prices fell to week-low of $1,214.

Holdings at SPDR Gold Trust, the largest gold-backed exchange-traded fund, increased by 1.6 metric tons to a record 1,306.1 metric tons, figures in the company’s website showed.

In Asia, spot gold went up $3 an ounce over the closing price in New York, to near $1,222 an ounce as of 10:15 am Vietnamese time.

Analysts said the metal may rebound in the next trading sessions due to the European debt crisis. Concerns on debt and budget deficits were the main factor that helped gold climb to a new record high.

The shared currency within the eurozone strengthened amid optimistic projections. The dollar exchange rate against the euro was at near $1.21 a euro this morning from more than $1.21 a euro last night, the highest level in a week.

Crude oil gained for three consecutive days as the US stock market rallied.

Light sweet crude oil futures for July settlement increased as much as $1.1 a barrel, or 1.5 percent, to close at $75.48, the highest closing price since May 12.

In Asia, crude oil slid to near $75 a barrel this morning.

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