Gold Demand Drops in Vietnam Alone Amid Southeast Asias Rising Market Trend
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In the most recent quarter, Vietnam became the only Southeast Asian country to experience a decrease in the demand for gold bars and coins. This drop in interest from consumers is largely attributed to the steep decline in gold prices.
In the second quarter, the demand for investment gold in Vietnam fell by 31% year-on-year to 6.5 tonnes, according to the World Gold Council. This placed Vietnam third in Southeast Asian sales, following Indonesia, which sold 14.5 tonnes, and Thailand, which sold 10.9 tonnes.
Factors Influencing the Decline
According to a recent report by the World Gold Council, several factors contributed to the weakened demand in Vietnam. Lower local prices dampened consumer sentiment, while import quotas distorted market conditions. This made the local price premium high, discouraging potential buyers.
As of now, Vietnam’s gold bar price has fallen by 7.7% since the beginning of the year, marking a 26% decrease from its peak at the end of January.
“As of now, Vietnam’s gold bar price has fallen by 7.7% since the beginning of the year, marking a 26% decrease from its peak at the end of January.”
In the first half of the year, Vietnam’s total sales of gold bars and coins amounted to 15.6 tonnes. This figure is considerably lower than that of Indonesia, which sold 38.1 tonnes, and Thailand, which sold 20.9 tonnes.
Regional Comparison
In tandem with the decline in gold bar and coin demand, Vietnam also reported the region’s most significant year-on-year decrease in jewelry demand, which fell by 28% to 1.8 tonnes.
Meanwhile, other countries in the region experienced growth in their gold markets. Indonesia emerged as one of the fastest-growing gold markets globally in the second quarter, with its demand surging by 40% year-on-year.
Thailand also had a strong second quarter, marking its best since 2019, as the drop in local gold prices stimulated bargain hunting.
Overall, Southeast Asia – comprising Indonesia, Malaysia, Singapore, Thailand, and Vietnam – saw an increase in gold bar and coin sales in the second quarter, reaching 36.7 tonnes, a 7.6% increase from the previous year. This contrasts with the global demand for bars and coins in the second quarter, which fell by 3% to 307.1 tonnes.
Questions & Answers
Q.Why is there a declining gold bar and coin demand in Vietnam?
Why is there a declining gold bar and coin demand in Vietnam?
The declining demand is largely due to the falling gold prices, which have dampened consumer sentiment. Additionally, import quotas have distorted market conditions, leading to discouragingly high local price premiums.
Q.How does Vietnam’s gold market compare to other Southeast Asian countries?
How does Vietnam’s gold market compare to other Southeast Asian countries?
Vietnam ranks third in gold bar and coin sales in Southeast Asia, following Indonesia and Thailand. However, unlike these countries, Vietnam has experienced a decrease in demand for gold bars and coins as well as jewelry.
Q.What trends are emerging in Southeast Asia’s gold market?
What trends are emerging in Southeast Asia’s gold market?
The region saw an overall increase in gold bar and coin sales in the second quarter, with Indonesia emerging as one of the fastest-growing markets. Conversely, Vietnam experienced a decline in demand across all categories.
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