Vietnam consumes 14.5 tons of gold in Q2
Vietnam consumes 14.5 tons of gold in Q2
The World Gold Council’s (WGC) report on gold demand trends showed Vietnam’s gold consumption was 14.5 tons in the second quarter of this year, falling around 23% compared to the previous quarter.
Of the total volume, gold bars accounted for 10.8 tons, down 25% quarter-on-quarter, and jewelry made up the remainder, down 16%.
The gold consumption in Vietnam in the first half totaled around 33.3 tons, almost equivalent to 48% of last year’s figure.
The fall in gold consumption was attributable to price differentials of the yellow metal on global and domestic markets, at US$100-150 an ounce.
WGC figures were supported by sales at big gold companies in Vietnam.
Nguyen Cong Tuong, deputy sales manager of Saigon Jewelry Company (SJC), said demand for gold was weak but China’s yuan devaluation had prompted people to scramble for gold in anticipation of higher prices, thus leading demand to surge around 20%.
Tuong said SJC’s sales amounted to about 1,000 taels while normal volume was hundreds of taels. In previous years, the firm saw an average buying volume of around 2,000 taels per day.
A banker said customers had purchased less gold in the past time as the price was mostly in decline and only inched up after China’s recent yuan depreciation. Besides, investors were hesitant to buy gold as price movements are hard to predict.
Notably, jewelry consumption in quarter two dropped against quarter one but went up by 22% year-on-year, and the total sales volume in the first six months of this year was equivalent to 63.5% of that of last year.
As explained by WGC, the declining gold price stimulated demand for jewelry. In addition, the gap between the world and local jewelry prices was not considerable, resulting in increasing jewelry holdings.
The fact that investors chose to buy gold rings, according to WGC, might be a reason for rising jewelry consumption while sales of gold bars decreased.
Vietnam’s gold consumption soared to 97 tons in 2013 when the central bank decided to import gold and sell it to banks via tenders. Banks were then required to stop gold mobilization and lending. Gold tenders ended last year, meaning that the country has since stopped official gold imports.
However, Vietnam still consumed around 69.1 tons of gold last year and around 33 tons in the first half this year.
According to the central bank, it will sell gold through tenders to stabilize the market if needed. But it has not intervened in the gold market in the past time as gold demand has been insignificant.
The SJC gold price has gone down 2.8% since the year’s beginning while the decline of the world price was 6.6% in the same period.
The price of SJC gold bars is currently around VND4.8 million per tael higher than the global price. The gap has been widened due to a smaller decline in the local price and the U.S. dollar price at banks has edged up 3% over early this year.
According to WGC, gold demand is calculated based on the total volume of gold and jewelry consumed in a country, or the total gold volume individuals buy directly.
