The price of gold in Vietnam fell by nearly VND500,000 per tael (1.2 ounces) on August 1 as global gold price plummeted after the US Federal Reserve decided to cut interest rate of the US dollar by 0.25 percent to 2-2.25 percent per annum due to low inflation pressure and impacts caused by movements in the world after its two-day meeting at the end of July.
This is the first time that Fed has lowered its benchmark interest rate since the global financial crisis in the period from 2007 to 2008. After Fed’s interest rate cut, several investors in the world sold gold to take profits so global bullion price slumped 1.17 percent to $1,409.4 an ounce in the midnight trading session on July 31.
Saigon Jewellery Company, the largest gold bar trader in Vietnam, bought gold at VND39.2 million per tael and sold at VND39.43 million per tael, down VND430,000 per tael in buying rate and VND400,000 per tael in selling rate, at 4 p.m. Vietnamese time in HCM City.
At the same time in Hanoi, Doji Gold and Gems Group, purchased gold at VND39.18 million per tael and sold at VND39.38 million per tael, down VND480,000 per tael in both buying and selling rates.
In related news, the Vietnam’s stock market rebounded to approach the 1,000-point mark on August 1 whereas the US stock market tumbled with Dow Jones losing 1.23 percent, S&P500 declining 1.1 percent and Nasdaq Composite dropping 1.19 percent.
The VN Index rallied 5.73 points, or 0.58 percent, to close at 997.39 points thanks to support from blue-chip stocks.
Meanwhile, the HNX-Index of the smaller bourse in the north went down 0.52 percent to 103.88 points.
Foreign investors net sold VND103 billion in this trading session. Market liquidity was fairly high with total trading volume at 222.6 million shares worth more than VND5.17 trillion.
After Fed’s decision, the prices of US dollar at commercial banks remained unchanged on August 1 although the State Bank of Vietnam raised reference exchange rate of the US dollar against the dong by VND6 per dollar compared to the previous day to VND23,079 per dollar.
Most commercial banks continued to maintain their US dollar exchange rate same as the previous day. Only Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) raised its exchange rate by VND5 per dollar to trade at VND23,145 per dollar for buying and VND23,265 for selling. Although the US dollar exchange rate against the dong did not change much, other major foreign currencies devaluated heavily, losing VND100 upwards compared to the previous day except the Japanese yen.
Particularly, the British pound dropped VND144 per pound to trade from VND27,759 to VND28,203 per pound. The euro fell VND271 per euro to trade around VND25,384 and VND26,225 per euro. The Canadian dollar declined VND100 per dollar to trade from VND17,251 to VND17,704 per dollar. The Australian dollar weakened by VND133 per dollar to trade from VND15,620 to VND15,982 per dollar. The Japanese yen slid VND1 per yen in selling price and VND2 per yen in buying price to trade around VND205-VND213 per yen.
