The demand for gold declined sharply by 42 percent in volume and 48 percent in value in the second quarter over the same period last year.

According to the latest report from the World Gold Council (WGC), Vietnam registered consumption of 19.3 tonnes worth 799 million USD.

The country's demand for jewellery was 2.8 tonnes worth 116 million USD, down 17 percent, while the figures for gold bars and coins were 16.5 tonnes worth 683 million USD, down 45 percent.

The WGC's report on global gold consumption in Q2 also showed that in the year ending June, Vietnam consumed 86.3 tonnes of gold worth 3.6 billion USD, down 4 percent in volume and 21 percent in value.

The WGC ranked Vietnam as the world's seventh largest gold consumer last year with 92.2 tonnes worth 4.16 billion USD, up 20 percent against the previous year.

Vietnam, this year, is seeing a decline in the demand for gold as decelerating inflation and more attractive opportunities in stocks, property and bank deposits have driven the interest away from it.

Experts said that this trend clearly showed the increasing trust that the country's expanding middle class had in the economy at large.

Traditionally, many saw gold as the only safe way to store their money, but now they are much more willing to keep their money in banks and invest in businesses, stocks and other types of financial instruments.

Nguyen Thanh Long, Chairman of the Vietnam Gold Traders Association, said that this trend was new to Vietnam.

Long explained that when the economy was unstable and inflation high, people only trusted gold. Now people are seeking investment in stocks and property, and even simply depositing money in banks could give them good returns, so demand for gold had dropped sharply, he said.

Experts forecast that gold consumption in Vietnam, the largest Southeast Asian gold consumer after Thailand, was likely to shrink by half this year to between 25 and 30 tonnes.

Under the WGC's Q2 report, the world's total gold demand in Q2 was 964 tonnes, down 16 percent against the same period last year. Demand for jewellery accounted for half that total.

India and China remained the world's top gold consumers with 154 and 143 tonnes, respectively.

Central banks of countries worldwide in Q2 bought 118 tonnes of gold, up 28 percent against the same period last year.-VNA