Taking a hit: Vietnam’s economy experienced sluggish growth in the first two quarters of this year, affecting local market sentiment and jewellery demand. — Reuters
HANOI: Demand for gold in Vietnam shrank 9% in the second quarter this year compared to the same period last year due to the economic difficulties, according to the World Gold Council.
In a recent report, the council said Vietnamese purchased 12.8 tonnes of gold in the second quarter of 2023, down 1.3 tonnes year-on-year.
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 second quarter’s 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.
In fact, visitors to gold shops in many streets specialising in selling gold in Hanoi, such as Tran Nhan Tong, Cau Giay and Ha Trung, have also been quite gloomy.
In the first half of this year, the domestic gold market also saw no price fever. The gold price inched up and down only in the range of 50,000 dong to 300,000 dong per tael, depending on each trading session.
Meanwhile, the gap between buying and selling price of gold remained high at around one million dong per tael, which often caused gold buyers to suffer heavy losses as soon as they bought the metal.
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 a decree that regulates the management of gold business and the State Bank of Vietnam’s (SBV) exclusive right to import gold bars.
Since the decree took effect in 2012, the SBV hasn’t 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 informed about the review and assessment of the implementation of a decree on gold business management. — Viet Nam News/ANN
