Domestic gold demand posts sharp drop in second quarter
Domestic gold demand posts sharp drop in second quarter
The demand for gold declined sharply by 42 per cent in volume and 48 per cent in value in the second quarter over the same period last year.
According to the latest report from the World Gold Council (WGC), Viet Nam registered consumption of 19.3 tonnes worth US$799 million.
The country's demand for jewellery was 2.8 tonnes worth $116 million, down 17 per cent, while the figures for gold bars and coins were 16.5 tonnes worth $683 million, down 45 per cent.
The WGC's report on global gold consumption in Q2 also showed that in the year ending June, Viet Nam consumed 86.3 tonnes of gold worth $3.6 billion, down 4 per cent in volume and 21 per cent in value.
The WGC ranked Viet Nam as the world's seventh largest gold consumer last year with 92.2 tonnes worth $4.16 billion, up 20 per cent against the previous year.
Viet Nam, this year, is seeing a decline in the demand for gold as decelerating inflation and more attractive opportunities in stocks, property and bank deposits have driven the interest away from it.
Experts said that this trend clearly showed the increasing trust that the country's expanding middle class had in the economy at large.
Traditionally, many saw gold as the only safe way to store their money, but now they are much more willing to keep their money in banks and invest in businesses, stocks and other types of financial instruments.
Nguyen Thanh Long, Chairman of the Viet Nam Gold Traders Association, said that this trend was new to Viet Nam.
Long explained that when the economy was unstable and inflation high, people only trusted gold. Now people are seeking investment in stocks and property, and even simply depositing money in banks could give them good returns, so demand for gold had dropped sharply, he said.
Experts forecast that gold consumption in Viet Nam, the largest Southeast Asian gold consumer after Thailand, was likely to shrink by half this year to between 25 and 30 tonnes.
Under the WGC's Q2 report, the world's total gold demand in Q2 was 964 tonnes, down 16 per cent against the same period last year. Demand for jewellery accounted for half that total.
India and China remained the world's top gold consumers with $154 and $143 tonnes, respectively.
Central banks of countries worldwide in Q2 bought 118 tonnes of gold, up 28 per cent against the same period last year.
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