Asian Economic News

Vietnam becomes one of SE Asia’s biggest gold consumers

Vietnam becomes one of SE Asia’s biggest gold consumers

HANOI, Feb. 26 Kyodo

Vietnam’s demand for gold set a new record in 2001 for the third successive year, with the country consuming 73 tons of gold, 13 tons more than in 2000, the official Vietnam News Agency (VNA) reported on Tuesday.

VNA quoted the World Gold Council (WGC) as saying earlier this month in its annual report on gold demand trends that Vietnam, with a year-on-year increase of 22%, registered the highest growth in demand in Southeast Asia and became one of the region’s biggest gold consumers.

In contrast, Malaysia consumed 22.7 tons of gold for a year-on-year increase of 8%; Thailand, 69.3 tons for a 3% increase; Indonesia, 108 tons for a 1% increase: and Singapore, 12.2 tons for a 1% increase.

The WGC said currency and interest rate fluctuations played a significant role in influencing gold demand across Southeast Asia as a whole, which reached 285.2 tons for 2001, representing a 7% increase.

The London-based council, which called Vietnam the ”star performer” in Southeast Asia last year, attributed the growth in demand for gold there last year partly to a strong fourth quarter economic performance.

The report said interest rates on currency assets remained uninvitingly low while domestic wage growth was strong. Increasing disposable income propelled jewelry demand, it said, adding that investment buying was also strong due to growing demand for gold bars for use in property transactions.

Property in Vietnam is frequently bought with gold tael bars and saving for house purchase is a key motivation behind investment purchases of gold.

In November, the report noted, a government decree authorized the establishment of the Vietnam gold trading center, a step towards market deregulation.

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