Vietnam gold price slips to near three-month lows
HANOI Oct 2 (Reuters) - Gold prices in Vietnam, Asia's fourth-largest consumer of the metal, fell to their lowest in nearly three months on Wednesday, reflecting a decline in domestic demand and a drop in international spot prices.
The precious metal has long been a popular investment option for the Vietnamese but operates in a market that is tightly controlled by the central bank in an attempt to stabilise dollar/dong exchange rates. Vietnam imports most of its gold requirements.
Demand for gold has weakened, partly after the State Bank of Vietnam, in a move to prevent hoarding of the metal, halted as of June 30 a scheme under which gold could be placed on deposit with banks, traders said.
About half of the 60 tonnes of the metal the central bank auctioned to banks and gold trading firms between March 28 and Sept. 27 were used by banks to repay gold depositors and the remainder was resold to the market, the State Bank of Vietnam said in a report on Monday.
The central bank has yet to announce any gold auctions this month.
"The demand (for gold) on the market has declined strongly, based on the State Bank of Vietnam's survey," the report said, adding annual demand for gold was between 50 and 100 tonnes.
The domestic spot gold selling price eased to 37.32 million dong ($1,770) per SJC-branded tael (37.5 grammes/1.21 ounces) at 0652 GMT in Ho Chi Minh City from Tuesday's close of 37.60 million dong, nearing the 37.25 million dong-level reached on July 3, according to Saigon Jewelry Co .
State-run Saigon Jewelry is the manufacturer of Vietnam's only brand permitted for domestic transactions of gold.
Gold traded near two-month lows on Wednesday as the first U.S. government shutdown in 17 years kept investors on edge, stoking worries of further liquidation after a sharp 3 percent drop in the previous session. ($1=21,090 dong) (Compiled by Ho Binh Minh; Editing by Muralikumar Anantharaman)