Hanoi (VNS/VNA) - Gold prices on global markets have made strong gainsin the past two months, but investors with short-term appetite seemuninterested in gold.

Goldfutures for the first time in six years broke the 1,450 USD per ounce lastweek, gaining 1.75 percent on August 2 and a total 13.6 percent since May 28.

Thestrong growth of gold futures is attributed to previous speculations of a Fedrate cut – which was realised on May 31, worries about the global economyoutlook, and increasing political, geographical and economic tensions.

Thosedevelopments, especially the Fed rate cut, sent US bond yield rates down andweakened the US dollar, which are the key factors making gold more expensive.

Inaddition, more tensions around the globe have pushed investors away from riskyassets like stocks and towards safety in gold. Meanwhile, the possibility of aglobal economic slowdown increases after China reported its Q2 economic growthof 6.2 percent is the lowest in 30 years and central banks have deliveredgloomier economic growth forecasts.

Thosenegative factors are forecast to boost gold prices to 2,000 USD per ounce atthe end of the year as they may make investors more pessimistic and avoidpurchasing risky assets.

Theincreases of gold futures on global markets also raises the prices of Vietnamesegold products to around 40 million VND per tael, equal to 30 million VND (1,290USD) per ounce

Since May28, prices of gold products have gained about 10 percent at Phu Nhuan JewelleryJSC (PNJ) to 39.92 million VND for a tael, equal to 29.94 million VND perounce.

Thoughprices have reached new levels, market demand is quiet, proving Vietnam’ssuccess with its anti-gold policy.

Accordingto Phan Dung Khanh, director of investment consultancy department at MaybankKim Eng Securities Co Ltd, the domestic gold market may not heat up like it dideight years ago.

Somefactors that may benefit the domestic gold market include the stability offoreign exchange rates between the VND and foreign currencies, a zero percentUS dollar savings yield rate and tightened policies regarding the number ofeligible gold businesses, he told Dau tu (Investment) newspaper.

Accordingto banking expert Can Van Luc, the domestic gold market was quite quiet in thefirst six months of the year though gold prices gained 10 percent globally and6.3 percent in the domestic market.

In thepast, buyers rushed to gold shops immediately when they heard gold prices wereup only 2-3 percent, he said.

The goldmarket had been controlled well and the stability of the foreign exchange rateshad increased the economy’s creditability to people, making them less interestedin buying gold, Luc said.

Thedomestic gold market had remained stable, economist Nguyen Minh Phong said, asthere was not much difference between buying and selling rates as well asbetween global and domestic gold prices.

The dailytrading was stable, plus, the central bank did not have to make publicannouncements to stabilise the market – which had been done before whenever themarket turned volatile, Phong said.

Inaddition, rushing into gold at the moment may not be a smart decision,especially after the Fed cut lending rates, business insiders said.

Buyinggold is somewhat risky in the short term while there are also other attractiveoptions for investors such as securities, real estate and corporate bonds, theysaid.

Goldshould be a long-term investment for institutional investors and anyindividuals buying in gold must stay updated about prices to lock in profits atthe right moment, they said.–VNS/VNA