Domestic gold prices soared on Oct. 6 to a new record of 33 million VND per tael (1,690 USD), an increase of 1.4 million VND (72 USD) per tael over Oct.5's price, as speculators created a run on gold shops.

A tael is equivalent to 1.2 ounces.

The gold-selling districts in Hanoi and HCM City were thronged with people and saw prices change at least four times in the morning, with Sai Gon Jewelry Co (SJC), Sacombank Jewelry Co, Bao Tin Minh Chau, Agribank Jewelry Co and Phu Nhuan Jewelry Co quoting buy/sell prices at 32.85/33 million VND.

Domestic gold prices have increased by over 24.4 percent since January, when prices stood at about 26.5 million VND (1,360 USD).

Sacombank Jewelry general director Nguyen Ngoc Que Chi said on Oct. 6's rush of buyers was due to a large number of speculators who had bought futures contracts in prior months and now sought to acquire gold before the price shot up further, putting a run on the available supply of the precious metal.

SJC's Hanoi director, Luu Quang Dien, agreed, adding, "Many big trades are made by phone and the supply is limited, so the company has to select familiar customers to whom to sell."

The increase made domestic gold price be 1 million VND (51.28 USD) higher than global gold price, which ignites concerns involving gold smuggling to take profits. Domestic price is normally just 200,000-300,000 VND higher than global price.

Rumours were rife on the gold market last week that supplies were falling short of demand and that gold prices would continue to set new record highs,so State Bank of Vietnam Governor Nguyen Van Giau attempted to counter the rumours and blamed any rises in prices on speculation rather than a gold shortage.

"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.

"Despite the shortage of gold at this time, I don't think the State Bank of Vietnam will allow enterprises to import more because of foreign exchange rates and inflation," commented the head of a jewelry company who asked to remain unnamed.

On the global market on Oct. 6, spot gold rose as high as 1,349.80 USD per ounce, its eighth record in the past two weeks.

The US dollar on black market on Oct. 6 also rose by 170 VND to 19,750-19,850 VND while bank exchange rates remained unchanged at 19,500 VND per dollar./.