Gold demand plunges 15% in Q1

The decline, driven largely by surging prices and supply shortages, was one of the steepest in Asia—surpassed only by Sri Lanka and China, it said in a recent report.

Demand for gold bars and coins fell by 15% to 12 tons, making Vietnam the only ASEAN country to report a decline in this category. The World Gold Council attributed the drop to limited supply, which pushed up premiums—the extra charges retailers add to cover costs or profit margins.

Jewelry demand also dropped to 3.5 tons in Vietnam, mirroring broader regional and global trends. Singapore experienced a sharper 20% decline in gold jewelry consumption, while Thailand saw an 8% drop.

Prices of bullion and plain gold rings surged by 20% in Vietnam to VND101.5 million and VND100.8 million per tael (of 37.5 gm).

Investors held on to gold, causing a scarcity and lower sales.

PNJ, Vietnam’s only listed gold retailer, said at its recent annual general meeting that demand dropped during Valentine’s Day (Feb. 14) and International Women’s Day (March 8).

On Feb. 2, the God of Wealth Day when people traditionally buy gold for luck, trading was noticeably subdued.

The company’s leaders blamed this on rapidly rising gold prices. Many people are holding on to gold in the hope of further price increases, they added.

The council highlighted gold’s role as a safe-haven asset and hedge against inflation, adding that currency depreciation and geopolitical risks have spurred investment in gold bullion and coins in other Southeast Asian countries.

In Thailand, positive price expectations fueled investment demand though it admittedly halved from the previous quarter.

In the case of jewelry, some markets have seen businesses adapt to shifting demand. In Malaysia, for instance, jewelers introduced trade-in programs for old jewelry to boost sales and sustain interest in gold products, according to the council.