Local gold prices dropped by 0.38 percent on July 16 to a four-week low of 36.6-36.7 million VND (1,686 – 1,692 USD) per tael, driven by a downward trend in world markets on a strengthening of the dollar on July 14-15.

Sai Gon Jewellery Company (SJC) traded bullion at 36.66-36.78 million VND per tael, while DOJI traded the SJC bullion, at 36.70-36.75 million VND per tael.

One tael is equivalent to 1.2 ounces.

Hoang Anh, a consultant with the Hanoi-based International Gold Company (IG) said: "World gold is reviving but is still below 1,300 USD. The domestic market needs to wait until tomorrow morning to catch the right trend."

Local gold price has dipped 0.62 percent in three days while world prices fell 3.3 percent in the last two sessions, with Reuters reporting it as the metal's biggest two-day loss since October.

On July 16, spot gold on the global market had gained 0.3 percent to 1,297.94 USD an ounce.

Reuters cited traders as saying gold could drop further, especially as this week's 40 USD drop failed to generate a robust pick up in physical demand in Asia.

On July 15, Fed Chair Janet Yellen signalled that the Fed will hold its monetary policy loose until jobs data shows the financial crisis's consequences are gone.

Market observers have said that if the Fed raised interest rates, there would be not many reasons for investors to hold gold.-VNA