Vietnam & World Gold Market News

Raw materials typically rise when the greenback falls.

“The market thinks inflation is coming,” Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, said by telephone. He has been trading gold for more than 30 years and believes gold won’t stay above $1,000 for long. “With interest rates so low, money is chasing money and the dollar is getting murdered.”

Governments have cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against the prospect of accelerating inflation and currency debasement. Gold, silver and palladium holdings in exchange-traded funds have reached record highs.

Gold in Vietnam leaped to a record high this week on the back of international price’s consecutive rallies.

Gold price of the Saigon Jewelry Holding Co., Vietnam’s largest gold merchant, rose for the fifth straight day to reach the all-time high of VND22.18 million per tael, or $1,036.82 an ounce, on Tuesday. A tael equals to 1.2 ounces.

Gold may set a record within five sessions and “it’s possible” that it will touch $1,200 within weeks, Prospector’s Kaplan said. “And if a new record doesn’t come soon, it doesn’t come in the near future,” Kaplan said. “Markets thinkthat the Fed isn’t going to withdraw stimulus money fast enough and that would cause inflation.”

“We don’t see any immediate recovery in the dollar and gold is one of the better alternatives,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “From here, the next technical level is $1,040, and at the rate it’s going, it might not be difficult. There’s a lot of new money coming into gold.”