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Vietnam's Gold Demand Drops Amidst Rising Global Demand
In a contrasting trend, Vietnam's gold demand decreased by 20% year-on-year to nine tonnes in the second quarter, while global gold demand rose by 3% to 1,249 tonnes, according to data from the World Gold Council. The total value of gold investment in Vietnam, however, increased by 12% year-on-year to $997 million in the same period.
The drop in Vietnam's gold demand can be attributed primarily to record-high gold prices, which limited purchasing power and reduced consumer demand for gold jewelry and investment products. This trend was observed across Southeast Asia, where jewelry demand fell to pandemic-era levels.
Higher gold prices can suppress physical gold purchases due to the pressure they put on buying power. However, they typically drive investment demand. The combination of high gold prices, geopolitical tensions, and market volatility can lead to a paradoxical situation where investment demand is stimulated, but physical gold purchases are suppressed when prices are elevated.
The decrease in Vietnam's gold demand is a notable departure from the double-digit growth seen in gold investment in other Southeast Asian countries, suggesting local factors such as economic conditions or shifting investor preferences may have played a role.
In contrast, the US saw a halving of its gold bar and coin demand to nine tonnes in Q2, while China's gold demand was 115 tonnes. Europe, on the other hand, experienced a more than doubling of net investment demand for gold to 28 tonnes in Q2.
The value of global gold demand in the second quarter was $132 billion, significantly higher than Vietnam's gold investment value of $997 million. The surge in global gold demand, in value terms, was 45% higher than Vietnam's gold investment value increase of 12% in the same quarter.
Despite the contrasting trends, it is important to note that no specific data was provided about gold demand in other countries or regions in the ASEAN region. This leaves room for further analysis and comparison of gold demand patterns across the region.
[1] Source: World Gold Council's Q2 2021 Gold Demand Trends report.
In the face of rising global gold demand, Vietnam's gold demand decreased, with a 12% increase in the value of gold investment, indicating a shift from physical gold purchases to investing in the finance sector, such as gold-backed exchange-traded funds (ETFs) or stocks. This trend provides an opportunity for AI-driven investment platforms to capitalize on the growing interest in gold investing, particularly in Southeast Asian markets and real-estate sectors that may offer attractive returns within the broader gold market.
