Economic difficulties push gold demand down

Vietnamese purchased 12.8 tonnes of gold in the second quarter of 2023, down 1.3 tonnes year-on-year, it added.

According to the council, Vietnam’s economy experienced sluggish growth in the first two quarters of this year, affecting local market sentiment and jewellery demand.

Local demand for gold bars and coins dropped by 5% year on year from 9.6 tonnes in the second quarter last year to 9.1 tonnes in the same period this year.

Meanwhile, demand for gold jewellery fell from 4.5 tonnes to 3.7 tonnes.

Shaokai Fan, Head of Asia-Pacific (excluding China) and Global Head of Central Banks at the World Gold Council, said the Q2 downward trend in Vietnam was like those in other markets in the ASEAN region.

The demand for gold bars and coins was also limited due to low liquidity, affected by the downturn of the stock market and real estate, he added.

The General Statistics Office also reported the gold price index in July 2023 decreased by 0.03% compared to the previous month. On average, in the first seven months of 2023, the gold price index increased by only 1.06%, a low level compared to the same period in recent years.

Besides the economic difficulties, one of the policies affecting the domestic gold market is Decree 24/2012/ND-CP which regulates the management of gold business and the State Bank of Vietnam (SBV)'s exclusive right to import gold bars. Since the decree took effect in 2012, the SBV hasn’t almost imported gold. The scarcity of supply is one of the reasons why the domestic gold market has been quite different from the global market.

After more than 10 years of being in effect, in a recent report sent to the National Assembly, SBV’s Governor Nguyen Thi Hong said about the review and assessment of the implementation of the decree./.