The domestic gold price on August 8 surged to an all-time high of 44.3 million VND (2,129 USD) per tael (One tael is equal to 1.2 ounces), after the global price surpassing 1,700 USD per ounce on the back of a long-term US credit downgrade.

Spot gold reached a lifetime high of around 1,716.50 USD an ounce on Kitco by noon, marking its 11th record in 19 sessions, as dealers sought out less-risky metals at a time of economic uncertainty. It fell to 1,704 USD an ounce by late afternoon.

"Domestic gold has never been traded at such an incredible speed during this morning," said Nguyen Huu Dang, a senior official at the Agribank Gold and Jewellery Co, adding, "It has conquered 42-43-44 million VND per tael in just two hours."

The Sai Gon Jewellery Co (SJC), Bao Tin Minh Chau, the Agribank Gold and Jewellery Co (AJC), the Sacombank Jewellery Co (SBJ), the Phu Nhuan Jewellery Co (PNJ) and Doji quoted prices of 43.6-44.3 million VND per tael, an increase of 2.5 million VND against the previous session.

Gold dealers in Hanoi , who had to adjust board prices continually, reported buyers trumping sellers by 6 to 4.

"I think the gold price will keep pushing higher levels," said Do Thi The, an investor at Bao Tin Minh Chau, who added that purchasing gold at this time would still be profitable.

Doan Thuy Hai, a seller and client of the Quang Hanh gold shop, said that, "I can't believe the price reached 44 million VND per tael. To my great regret, I had sold a large number of gold at only 39 million VND per tael."

Some gold shops had to sign future contracts to meet surging market demands. "I sold 0.5 tael, purchased at 40 million VND per tael, on Aug. 8, making a 2 million VND profit," a SJC retailer said.

The gap between selling and buying prices were widened to 700,000-900,000 VND per tael (previously 200,000 VND) to minimise risks.

Tran Quoc Quynh, a senior official at the Vietnam Gold Traders' Association, said, "The gap between selling and buying prices has revealed that gold dealers are treading with caution. I think people should do the same."

Quynh said that, besides impacts from the global gold market, the country's gold import ban had contributed to shortages in gold supply on the market, boosting domestic gold.

"To balance out supply and demand, the Government should consider allowing firms to import gold again," Quynh said.

Some industry insiders have predicted that gold might well reach 1,800 USD per ounce due to US market turmoil and the debt crisis in Europe .

S&P's downgrade compounded already weak sentiment amid fears that the eurozone debt crisis was predicted to spread to other nations, while the United States has posted data indicating an economic slowdown.

The US dollar on August 8 was quoted at 20,600-20,800 VND at banks and 20,750-20,850 VND on the black market - the highest level over the past three months, an increase of 110-150 VND per dollar against last week. /.