Speculators cause domestic gold hike

The price of gold on the local market has risen due to possible speculation rather than a supply shortage, according to Nguyen Van Giau, governor of the State Bank of Vietnam (SBV).

The global gold price set new records in the past few days, as did the domestic gold market.

The SBV and the Vietnam Gold Association had kept a close watch on the market in the last few days, and discovered there was no shortage of gold, Giau said, adding that speculation was possibly the cause for the price rise.

Domestic gold prices in August and the first half of September were lower than the world price. But currently the domestic price is VND400,000 per tael higher than the global price.

The SBV was working with other agencies, including the police and market management, to discover the reasons behind the price hikes.

"With this kind of sensitive item, our policy is not to completely ban gold imports, but gold companies are not permitted to import any volume they want," Giau said.

"We are establishing a management framework for gold trading and imports so that it is suitable with a market economy. We will collect ideas from ministries and industries when we complete it."

Nguyen The Hung, general director of the Vietnam Gold Investment and Trading Co, said the gold price on the domestic market would be equal or even lower than the world price if the SBV permitted gold importers to import gold.

However, the government has stopped granting permits for gold imports, which indicates that it no longer considers gold an essential item, according to an expert.

In addition, the higher gold price had not affected people's lives since few people conducted their transactions in gold, he said.

The gold price on the domestic market on Thursday morning fell to VND31.15 million (US$1,597) per tael (1.2 ounces) after it reached a record of more than VND31.3 million ($1,605 USD) per tael on Wednesday, following an upward trend in global gold prices.

On Thursday morning, SBJ gold was also bought and sold at VND31.15 million ($1,597) and VND31.18 million ($1,599) per tael, respectively.

Sai Gon Jewelry Holding Co on the same day bought the precious metal at VND31.14 million and sold it at VND31.18 million VND per tael, a reduction of 130,000 – 170,000 VND against Wednesday.

Most gold shops in Ho Chi Minh City Wednesday raised their price by more than VND700,000 ($21.3) over the previous day’s price to VND31.25-31.36 million per tael.

The global gold price on that day reached an all-time high of $1,313 an ounce on speculation that a global economic recovery would stoke inflation. In Asia, the metal slightly fell to $1,309 an ounce in the morning.

The weakening of the US dollar on the world market has also contributed to the gold price hike, analysts have said.

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Speculators cause domestic gold hike

The price of gold on the local market has risen due to possible speculation rather than a supply shortage, according to Nguyen Van Giau, governor of the State Bank of Vietnam (SBV).

The global gold price set new records in the past few days, as did the domestic gold market.

The SBV and the Vietnam Gold Association had kept a close watch on the market in the last few days, and discovered there was no shortage of gold, Giau said, adding that speculation was possibly the cause for the price rise.

Domestic gold prices in August and the first half of September were lower than the world price. But currently the domestic price is VND400,000 per tael higher than the global price.

The SBV was working with other agencies, including the police and market management, to discover the reasons behind the price hikes.

"With this kind of sensitive item, our policy is not to completely ban gold imports, but gold companies are not permitted to import any volume they want," Giau said.

"We are establishing a management framework for gold trading and imports so that it is suitable with a market economy. We will collect ideas from ministries and industries when we complete it."

Nguyen The Hung, general director of the Vietnam Gold Investment and Trading Co, said the gold price on the domestic market would be equal or even lower than the world price if the SBV permitted gold importers to import gold.

However, the government has stopped granting permits for gold imports, which indicates that it no longer considers gold an essential item, according to an expert.

In addition, the higher gold price had not affected people's lives since few people conducted their transactions in gold, he said.

The gold price on the domestic market on Thursday morning fell to VND31.15 million (US$1,597) per tael (1.2 ounces) after it reached a record of more than VND31.3 million ($1,605 USD) per tael on Wednesday, following an upward trend in global gold prices.

On Thursday morning, SBJ gold was also bought and sold at VND31.15 million ($1,597) and VND31.18 million ($1,599) per tael, respectively.

Sai Gon Jewelry Holding Co on the same day bought the precious metal at VND31.14 million and sold it at VND31.18 million VND per tael, a reduction of 130,000 – 170,000 VND against Wednesday.

Most gold shops in Ho Chi Minh City Wednesday raised their price by more than VND700,000 ($21.3) over the previous day’s price to VND31.25-31.36 million per tael.

The global gold price on that day reached an all-time high of $1,313 an ounce on speculation that a global economic recovery would stoke inflation. In Asia, the metal slightly fell to $1,309 an ounce in the morning.

The weakening of the US dollar on the world market has also contributed to the gold price hike, analysts have said.

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JICA to increase aid to Vietnam

Photo: Tuoi Tre

The Japan International Cooperation Agency (JICA) in Vietnam has said it wants to increase the amount of aid it provides to Vietnam in the future.

JICA’s chief representative in Vietnam Tsuno Motonori said that JICA had come to the decision because Vietnam has joined the group of average income nations which shows that Vietnam now has a higher economic capacity and uses capital more effectively.

He said that future JICA assistance will be based on the Vietnamese Government’s requirements and the agency will help to upgrade the nation’s transport and electricity infrastructure. It will also help Vietnam to improve personnel training and policy mechanisms.

Out of all the countries that have received JICA aid, Vietnam has been the most successful in disbursing the funding, he noted.

In the early 1990s, Japan’s official development assistance (ODA) was used to build road networks in the northern region, including highways 5, 10 and 18, the Bai Chay Bridge in the northern province of Quang Ninh and the Binh Bridge in the northern city of Hai Phong. The traffic system has considerably improved transportation in the northern region as well as people’s standards of living.

However, in an interview with the Banking Times on Wednesday, Motonori said that Vietnam should focus on improving its infrastructure, human resources and institutions to increase the competitiveness of its national economy.

Vietnam needs to mobilize more private capital through public private partnerships, he added.

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JICA to increase aid to Vietnam

Photo: Tuoi Tre

The Japan International Cooperation Agency (JICA) in Vietnam has said it wants to increase the amount of aid it provides to Vietnam in the future.

JICA’s chief representative in Vietnam Tsuno Motonori said that JICA had come to the decision because Vietnam has joined the group of average income nations which shows that Vietnam now has a higher economic capacity and uses capital more effectively.

He said that future JICA assistance will be based on the Vietnamese Government’s requirements and the agency will help to upgrade the nation’s transport and electricity infrastructure. It will also help Vietnam to improve personnel training and policy mechanisms.

Out of all the countries that have received JICA aid, Vietnam has been the most successful in disbursing the funding, he noted.

In the early 1990s, Japan’s official development assistance (ODA) was used to build road networks in the northern region, including highways 5, 10 and 18, the Bai Chay Bridge in the northern province of Quang Ninh and the Binh Bridge in the northern city of Hai Phong. The traffic system has considerably improved transportation in the northern region as well as people’s standards of living.

However, in an interview with the Banking Times on Wednesday, Motonori said that Vietnam should focus on improving its infrastructure, human resources and institutions to increase the competitiveness of its national economy.

Vietnam needs to mobilize more private capital through public private partnerships, he added.

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Post-crisis Paris car show goes electric, looks to Asia

BMW prototype 'Vision' is seen during the press days of the Paris Auto Show.

Photo: AFP

PARIS - Glamorous women draped themselves over gleaming vehicles and technicians plugged in electric cars Thursday as the world's auto industry met in Paris to showcase dozens of new models and pray that crisis is behind it.

The worst global slump since the 1930s savaged the industry and it is now setting its sights on emerging markets like China and India to compensate for stagnating sales and fierce competition in Europe.

"In 2010 we are dealing with a two-speed world," said PSA Peugeot Citroen boss Philippe Varin as he presented the French firm's new models at the Paris Motor Show.

In Europe carmakers are expecting a drop of seven percent in sales this year but in China they continue to rise rapidly, making it the biggest and fastest growing market and an eldorado for the industry.

Carmakers are hoping places like China, India and Brazil will snap up the models displayed at the show that opens to the public Saturday after press previews and a visit Friday by President Nicolas Sarkozy.

More than a million visitors were expected to flock to the huge exhibition halls to ogle shiny vehicles -- and the pretty women employed to stand next to them -- and see for themselves the latest innovations in the art of driving.

A major feature of this year's exhibition is a range of electric cars -- with the French leading the pack -- ready to hit the road.

High glamour comes in the form of sports cars from Ferrari, Porsche and Lamborghini, while Renault and Citroen add a touch of fashion by showcasing cars they built in partnership with fashion brands Lacoste and Miss Sixty.

Kia's three-seater electric "Pop" concept car, featuring "butterfly-wing" doors that open both upwards and forwards, was creating a buzz at the show held every two years.

Mercedes unveiled its new CLS which mixes coupe styling with the four doors of a saloon. Ford showed to European buyers its new Focus range, while the future of family cars may be hinted at in Vauxhall's GTC Paris Concept.

Peugeot features its upgrade for the 407, the 508, and visitors will get a peek at the new Citroen C4.

Chevrolet premiered four new models as part of a bid by the iconic US carmaker to boost its tiny market share in Europe.

Ever tougher regulations on carbon dioxide emissions, environmental worries and uncertainty over oil prices are all major concerns for the auto groups.

Carmakers are continuing to invest heavily in new technologies to reduce CO2 emissions and slash energy consumption.

This week they put on display some of their results at the Paris show, where an entire hall was dedicated to emerging energies and clean cars.

Renault presented the electric Fluence ZE (zero emission) saloon and its Kangoo Express ZE van, which are expected to go on sale next year, and also unveiled a near-final version of its flagship Zoe model.

PSA displayed the Peugeot Ion and Citroen C-Zero runabouts, derived from the Mitsubishi i-Miev, and Nissan showed off its Leaf saloon.

"We have now moved from electric concept cars to cars you can actually buy," said Carlos da Silva of IHS Global Insight. "Paris will be the first car show in the world where there really will be five or six cars you can choose from."

Citroen showcased an electric Berlingo van that left Shanghai after the World Expo there in May and was driven 14,000 kilometers (8,700 miles) across Asia to Paris.

Electric cars may be the future but many potential buyers are likely to wait to see if the necessary recharging infrastructure can be put in place before taking the leap.

Ford Europe boss Stephen Odell told AFP that his firm was on track to deliver five electric cars in Europe over the next five years but warned that the technology needed to improve dramatically for the market to expand.

He believes that even 10 years from now, most cars will still be running on diesel or petrol engines.

"Frankly the technology needs to get better, with a longer range ... and the cost has got to come down. And there's the infrastructure -- where are you going to charge your car?" he asked.

Manufacturers are in parallel continuing to develop hybrids, with PSA due to bring out a diesel-electricity hybrid next year.

But improving traditional engines remains a major goal. Innovations which can reduce size without also reducing performance result in cars like the two-cylinder TwinAir Turbo that Fiat is showcasing.

"New technologies are the tip of the iceberg but in fact what continues to sell and what makes up the bulk of sales are traditional cars," said Carlos da Silva.

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Asian stocks advance as China data boosts hopes

Photo: Reuters

SINGAPORE - Asian stocks rose on Friday as stronger-than expected economic indicators from China and the United States boosted confidence in the global economic recovery.

European shares also rose, after slipping in the previous four sessions amid debt concerns in the euro zone. The FTSEurofirst 300 rose 0.2 percent, Britain's FTSE 100 gained 0.6 percent, Germany's DAX rose 0.4 percent and France's CAC 40 was up 0.3 percent.

Chinese manufacturing gathered momentum last month, handily beating market forecasts and providing further evidence that the economy is pulling smoothly out of a second-quarter slowdown.

The MSCI index of Asia Pacific stocks outside Japan was up 0.34 percent compared with a rise of 0.24 before the release of China's Purchasing Managers Index. The index gained more than 17 percent in the last quarter.

"This looks like the real deal. It's not just inventory correction. We think that end demand is picking up in China and the economy has stabilized after the summer lull," said Frederick Neuman, co-head Asian economics, HSBC in Hong Kong.

Japan's Nikkei average closed up 0.37 percent on Friday, helped by short-covering after sharp falls the previous day and after US economic data provided a degree of optimism.

The index gained 6.2 percent in September, it is more than 2 percent off the peak hit after Japanese authorities conducted currency market intervention on September 15 to weaken the yen.

"Japanese stocks are recouping some ground as investors appear to be correcting extreme pessimism triggered yesterday by the yen's advance and worries about European finance problems," said Koichi Nosaka, a market analyst at Securities Japan Inc.

Data watch

US data on Thursday showed new jobless benefits fell last week and regional manufacturing grew faster than expected.

Later on Friday, the Institute for Supply Management is scheduled to release US manufacturing data.

US Treasury prices slipped as investors turned to stocks and the dollar held steady after dropping to an eight-month low against a basket of currencies the previous day.

The euro paused below a five-month high on the dollar hit the previous day, helped by data showing euro zone banks are relying less on funds from the European Central Bank.

The dollar dipped 0.1 percent to 83.47 yen, but stayed above the previous day's low at 83.16 yen and last month's 15-year trough below 83.00 that had prompted Japanese authorities to intervene for the first time in six years.

The Australian dollar jumped on optimism that the strong data from China augured well for the country's resource exports.

Oil rose above $80 on Friday, staying at a seven-week high, as the renewed momentum in China's manufacturing sector pointed to stronger demand. Copper also advanced on hopes of greater Chinese demand.

But gold, widely seen as a safe haven, also ticked up, hovering within sight of a lifetime high, although traders said the improving data from China and the US could curb gains.

Traders said spot gold, which stood at $1,310.40 an ounce after hitting a record around $1,315 the previous day, remained volatile as investors watched for signs of a firmer US recovery.

"I guess speculation will still be rife as to the state of the US economy. The need or not for a QE2 from the Fed," said Darren Heathcote, head of trading at Investec Australia in Sydney.

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Gold firms near lifetime high

Photo: AFP

SINGAPORE - Gold ticked up on Friday and held near of a lifetime high, but improving US and China data, which suggested growing global economic strength, could curb gains.

China's manufacturing sector gathered momentum in September, handily beating market forecasts and providing further evidence that the economy is pulling smoothly out of a second-quarter slowdown.

Silver held near a 30-year high, platinum rose to a four-month high to track gains on TOCOM platinum futures while industrial demand helped sister metal palladium stayed near its strongest level since early 2008.

Spot gold added $4.70 an ounce to $1,309.95 after hitting a record around $1,315 on Thursday, racking up its eighth consecutive quarterly gain as the US Federal Reserve appeared ready to pump more cash in the struggling economy.

"I guess speculation will still be rife as to the state of the US economy. The need or not for a QE2 (second round of quantitative easing) from the Fed," said Darren Heatchcote, head of trading at Investec Australia in Sydney.

"I think we can expect (gold) to remain volatile. Its movement has been determined by the US dollar at the moment."

But Thursday's data showed new US jobless claims fell last week, regional manufacturing grew faster than expected and consumer spending was slightly stronger than expected earlier in the year, injecting a little caution about the prospects for more quantitative easing from the Fed.

"If it stays above $1,305, I think the more medium-term target could be sort of $1,345," said Heathcote of Investec, who pegged downside target around $1,290s.

US gold futures for December delivery rose $1.6 an ounce to $1,311.2 an ounce, having struck a record at $1,317.50 on Thursday.

The euro edged up toward a five-month high on the US dollar on Friday and the Australian dollar gained after upbeat Chinese data encouraged a little risk-taking in the higher-yielding currency ahead of US indicators.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings eased to 1,304.776 tons by Thursday from 1,305.688 tons on Tuesday. The holdings hit a record at 1,320.436 tons on June 29.

The physical sector noted selling from Indonesia and bargain hunting from Thai gold consumers, while dealers in Tokyo saw a bit of activity in Platinum Group Metals.

Higher gold prices widened the discounts for gold bars in Tokyo to 50 cents below the spot London price from 25 cents last week. China's financial markets are closed for a week from October 1 to 7 for the National Day holiday.

"There's a bit buying on TOCOM platinum, that's why spot price is increasing. But I don't see demand the industrial sector because the price is too high anyway," said a dealer in Tokyo.

"There's a bit of buying for palladium in Japan and also the other parts of Asia. That demand comes from the auto and dental industries."

Platinum and palladium are used in jewelry, autocatalysts and also in dentistry.

In other markets, The Nikkei pared gains sharply on Friday, weighed down by large-lot selling of futures and declines in banking shares, while oil rose above $80 a barrel, staying at a seven-week high.

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