Domestic consumption of gold bars and jewelry in the second quarter of the year plunged to 19.3 tons from the 33.4 tons recorded a year ago, according a report by the World Gold Council.
The report puts sales of gold jewelry at around 2.8 tons and those of gold bars at 16.5 tons in April-June.
The gold market is under absolute control by the State Bank of Vietnam, which supplies gold for the market through auctions. Since early this year the central bank has suspended gold auctions, making the local price of the yellow metal US$100-150 per tael higher than the world level. A tael is equivalent to 1.2 troy ounces.
The report however says gold imported into the country through informal channels has helped make up for the lack of official gold supply but is not sufficient.
A gold expert said gold is no longer a safe haven for Vietnamese people. This is evident in very low gold transactions.
Saigon Jewelry Holding Company, the country’s leading gold trader, reports daily trading volume of 1,000 to 1,500 taels.
The gold market experienced one of the most turbulent times in the second quarter when China illegally parked a giant oil rig inside Vietnam’s exclusive economic zone and continental shelf. Demand for gold edged up but not strongly.
In the coming time, there will be a low possibility of the central bank increasing gold supply for the market because the central bank once said it would intervene when the market turned too volatile.
In the year to August 15 gold had marked up by 5.67%, or VND1.97 million, year on year. SJC gold had sold at VND36.67 million per tael, VND2.5 million per tael higher than world prices, while prices of 99.99% gold rings had been VND34.15 million per tael, almost on par with global levels