Jewellery consumption in Vietnam more than trebled year-on-year to 4 tonnes in the third quarter of this year. (Photo: VNA/VNS) The Gold Demand Trends report revealed that demand was buoyed by continuedrecovery from the COVID-19 pandemic as most remaining restrictions were lifted,allowing full economic activity to resume.
In Vietnam, jewellery consumption more than trebled year-on-year to 4 tonnes,the report found, adding that the sizable increase was largely due to thecomparison with a very weak third quarter of 2021.
Nevertheless, the Vietnamese recovery had been particularly robust with healthyGDP growth, incomes boosted by reversed salary cuts and companies returning tofull employment, all of which boosted demand.
Regarding gold coins and bars, Vietnam saw a particularly significantyear-on-year rise in investment demand. It more than trebled to 8 tonnes aslocal investors again sought refuge in gold, with high demand for chi rings and SJC tael bars.
“Investment demand across Southeast Asian markets was robust on the back ofconcerns about inflation, local currency depreciations against the US dollarand the sustainability of medium-term economic growth,” the report wrote.
Meanwhile, Phu Quy Jewelry Store sales manager Tran Xuan Dung said that in thethird quarter gold jewellery recorded higher demand than in thesecond quarter.
However, consumption these days is not too high although this isthe time of the wedding season.
"In addition, demand for safe-haven storage is not large," Dung said.
According to the report, the global gold demand, excluding over-the-counter(OTC) in the third quarter was 28% higher year-on-year at 1,181 tonnes, drivenby stronger consumer and central bank buying which helped year-to-date demandrecover to pre-COVID norms.
Jewellery consumption reached a robust 523 tonnes, increasing 10% year-on-yeardespite the deteriorating global economic backdrop.
Central banks continued to accumulate gold, with purchases estimated at aquarterly record of nearly 400 tonnes. An 8% year-on-year fall in technologydemand reflected a fall in consumer demand for electronics due to the globaleconomic downturn.
Investment demand (excluding OTC) for the third quarter was 47% loweryear-on-year at 124 tonnes, reflecting weak sentiment among some investorsegments.
The report said that 36% growth in bar and coin investment was insufficient tooffset 227 tonnes of ETF outflows. “Investment demand diverged on differingpriorities. Retail investors bought gold as a store of value amid surgingglobal inflation, while ETF investors reduced their holdings in the face ofrising global interest rates.”
The report said that revised down on negative Q3 sentiment but macroeconomicrisks and short covering may lure investors back. “A very weak Q3 leads us tobelieve that a good deal of negative sentiment towards gold has been flushedout of investment. The impact of further policy rate hike surprises and USdollar’s safe-haven strength may be fading. Furthermore, they have alreadypushed negative gold price sentiment to historical extremes, paving the way fora reversal in trend as some investors may close short positions in Q4.”
Regarding supply, total supply in the third quarter increased by 1%year-on-year as lower recycling offset mine production growth.
Mine production increased to almost 950 tonnes, up 2% following the recovery inChinese output and fewer technical difficulties elsewhere. Recycled gold supplyfell 6%, primarily due to lockdowns in China and limited signs of distressselling in other markets./.
VNA
