Vietnam gold bar prices plunged by 4.2% on Monday amid a sharp drop in global bullion rates.
Saigon Jewelry Company gold bars fell to VND163.8 million (US$6,220.1) per tael, down from VND171 million at the session’s open.
The gap between local and global bullion rates widened to a record VND31 million per tael.
Gold ring price dropped 6.15% to VND160.2 million per tael. A tael equals 37.5 grams or 1.2 ounces.
Globally, gold erased more than its gains for the year on Monday, extending its slide to a ninth straight session as tensions in the Middle East heightened inflation concerns and reinforced expectations of higher interest rates.
Spot gold tumbled 8.6% to $4,108.64 an ounce during the session, according to Bloomberg. U.S. gold futures for April delivery dropped 7.5% to $4,231.80.
The metal dropped more than 10% last week, its worst week since February 1983, and has also retreated more than 20% from its record peak of $5,594.82 an ounce reached on Jan. 29.
Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if U.S. President Donald Trump follows through with his threat to hit Iran’s electricity grid in 48 hours. Asian shares fell, and oil prices stayed well above $110 a barrel, as reported by Reuters.
The shutdown of the Strait of Hormuz has sustained high oil prices, intensifying inflationary pressures as transport and production costs rise. Although inflation usually increases gold’s appeal as a hedge, higher interest rates tend to weaken demand for the non-yielding metal.
“A reinforced shift from safe-haven allocation towards macro-driven positioning could skew risks further to the downside, as a firmer U.S. dollar and the receding probability of the Fed easing dominate the narrative,” said BMI, a unit of Fitch Solutions.
