Economic difficulties make Vietnamese less interested in gold

August 4, 2023 13:52 Nhat Linh Print article

ANTD.VN - Consumer demand for gold in Vietnam decreased by 9% in the second quarter of 2023 compared to the same period last year, according to newly released data from the World Gold Council (WGC).

Specifically, the latest WGC Gold Demand Trends Report said that gold benefited from record purchases by central banks in the first half of the year, as well as receiving support from healthy investment markets and stable jewelry demand.

Gold demand (excluding the OTC market) fell 2% year-on-year to 921 tonnes in the second quarter, although total demand (including the OTC market) increased 7% year-on-year, suggesting the gold market remained stable globally.

In Vietnam, consumer demand for gold in the second quarter of 2023 decreased by 9%, from 14 tons in the second quarter of 2022 to 12.7 tons. This decline was mainly due to a 5% year-on-year decrease in demand for gold bars and coins, from 9.6 tons in the second quarter of 2022 to 9.1 tons in the second quarter of 2023.

For the jewelry segment, the decline is even sharper as demand falls from 4.5 tonnes in Q2/2022 to 3.7 tonnes in Q2/2023, equivalent to an 18% year-on-year decrease.

Economic difficulties, Vietnamese people are less interested in gold photo 1

Vietnamese demand for gold decreases due to economic difficulties

“Similar to other markets in the ASEAN region, consumer gold demand in Vietnam also declined this quarter,” said Mr. Shaokai Fan, Managing Director for Asia Pacific (excluding China) & Head of Global Central Banks at the World Gold Council.

The economic downturn in Vietnam for two consecutive quarters has affected market sentiment and demand for jewelry. Demand for gold bars and coins has also been limited due to low liquidity, affected by the downturn in the stock and real estate markets.

Central bank gold demand in Q2/2023 decreased year-on-year to 103 tonnes, mainly due to net selling in Türkiye to meet domestic demand.

However, central banks still bought a record 387 tonnes of gold in the first half of the year, and quarterly gold demand remains positive over the long term, suggesting that central bank buying will remain strong throughout the year.

In terms of gold investment, demand for gold bars and coins increased by 6% y-o-y to 277 tonnes in Q2/2023, with total investment reaching 582 tonnes in H1/2023, thanks to growth in key markets including the US and Türkiye.

Meanwhile, outflows from gold exchange-traded funds (ETFs) reached 21 tonnes in the second quarter of 2023, significantly less than the 47 tonnes in the same quarter of 2022, and contributed to a total net outflow of 50 tonnes in the first half of the year.

Jewelry consumption remained stable despite rising gold prices, rising 3% year-on-year in the second quarter to reach a total of 951 tonnes in the first half of 2023. Recovery in Chinese demand and strong consumer purchases in Türkiye boosted gold consumption in the second quarter of 2023.

Record central bank demand for gold has kept the gold market in check over the past year, according to Louise Street, Market Research Specialist at WGC.

“Despite a slower pace of growth in the second quarter of 2023, the central bank buying trend has demonstrated the importance of gold as a safe-haven asset amid ongoing geopolitical tensions and challenging economic conditions around the world,” she said.

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