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Gold prices skyrocket and Asian currencies drop because of Covid-19

Gold prices skyrocket and Asian currencies drop because of Covid-19

Tuesday 25, 02 2020
The rapid spread of the Covid-19 epidemic outside of China contributed to the decline in Asian currencies on Feb 24th

As investors rushed into gold and the US dollar to ensure safety. This impacted on precious metals, pushing the world gold price to reach 1,680 dollars/ounce, making the domestic gold price also increase sharply and reach a record level of 49 million dong/tael.

Domestic gold reached the level of more than 49 million VND/tael

In Vietnam, on 24th February, the increasing trend of the domestic gold price was continuously widened from the morning to the afternoon, and many enterprises have announced the offer price of more than 49 million VND/tael.

By 4 pm, Saigon Jewelry Company had listed the price of SJC gold from 47.80 to 49.00 million dong/tael, increasing by 1.2 million VND/tael within 2 hours of the afternoon session. Other businesses like Hanoi Doji Company and Phu Quy Company had also pushed the SJC gold price to a very high level from 47.70 to 49.20 million dong/tael. Meanwhile, Thang Long Dragon gold price of Bao Tin Minh Chau was also adjusted to a new level of 49.04 million VND / tael.

Notably, the spread between the bid and offer prices was seriously widened. If this spread in Saigon Jewelry Company is 1.2 million VND / tael, then at Doji Company, it is up to 1.5 million VND / tael. Meanwhile, the same difference for Thang Long Dragon gold is 1.3 million dong/tael.

According to the Vietnam News Agency, a representative of a gold business in Hanoi said that in addition to the psychological impact of the Covid-19 disease, the more important cause is the development of the global gold prices. Reuters quoted analysts' forecasts that this precious metal will soon reach the threshold of 1,700 USD / ounce.

On February 24th, the global gold price was US $ 1,680 / ounce. This price is equivalent to 47.2 million VND / tael when converted according to the domestic USD exchange rate.

Asian currencies depreciated

Contrary to the "skyrocketing" of gold prices, Asian currencies fell on February 24 following news of the rapid spread of coronavirus (Covid-19). This resulted in worries about the outbreak and investors rushing into gold and dollar to ensure safety.

The local currencies of China, Australia, New Zealand, Singapore and Taiwan (China) are all having a downward trend, in which the Australian dollar (AUD) has recorded a new low over the past 11 years. The Korean won has also dropped by nearly 1% to its lowest level in the last 6 months. Meanwhile, political instability in Malaysia has put pressure on the local currency and the ringgit has fallen by 0.6%, to its lowest level since September 2019.

The Japanese yen, after recovering slightly late last week, is currently trading flat at 111.55 yen / USD as Asian investors worry about the safety of the currency amidst the complicated development of the disease.

According to Reuters, analysts at the British Barclays Bank said the market's reaction to the Covid-19 epidemic was distinguishing "virus-susceptible" currencies from the rest. Accordingly, the property valuation in USD is attractive.

Experts say that Covid-19, in fact, does not affect US growth because it has few cases and low dependence on the Chinese economy. Currently, the US dollar is increasing again; Accordingly, the exchange rate against the euro is stable at 1.0827 USD per euro and that against the pound is at 1.2946 USD per pound.

Gold Prices Skyrocket and Assian currencies drop because of Covid 19

The Covid-19 epidemic is developing complicatedly

According to data from the National Health Commission of China (NHC), on February 23rd, 409 new infections and 150 deaths from Covid-19 occurred in mainland China. The NHC said the number of new infections in mainland China on February 23rd was lower than the number of 648 on February 22nd. In addition, February 23rd is also the sixth consecutive day that the number of cured and discharged is higher than the number of new cases in mainland China.

However, the number of cases in Italy, South Korea, and Iran increased sharply over the weekend. As of February 24th, Italy has had more than 150 infected people. On the same day, the semi-official Iranian news agency (ISNA) quoted Iranian National Assembly spokesman Assadollah Abbassi’s saying that there had been four new deaths from Covid-19 infection, bringing the total number of deaths in Iran to more than 12 cases. This is currently the country with the highest number of deaths outside mainland China.

The Tehran government has launched a series of emergency precautions, including a decision to temporarily close schools and cultural centers to prevent the spread of the acute Covid-19 respiratory infection. The World Health Organization (WHO) has expressed concern that the increased number of cases is not clearly linked to the epidemic in China.

On February 24th, according to the Yonhap news agency, South Korea confirmed 231 more cases of Covid-19 acute respiratory infection caused by the new strain of coronavirus (SARS-CoV-2), increasing the total number of cases to 833. This is a "record" by day, with new cases lie mainly in the city of Daegu, where health authorities are focusing human resources to prevent the spread of disease across the country.

The seventh death in South Korea also took place near Daegu when the 62-year-old male patient died at Cheongdo Hospital on Sunday (February 23rd). On the afternoon of February 24, the Hong Kong Central for Health Protection (CHP) said there had been four more new cases of patients infected with the coronavirus, bringing the total number of infections in this territory to 79 people.

​>> A glance at Vietnam’s consumer behaviors amid COVID-19 outbreak

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