Gold investment demand on our site reaches nearly $1 billion every quarter
In the second quarter of 2021, global gold demand reached an impressive 1,249 tonnes, marking a 3% increase year-on-year, and was worth a staggering $132 billion, a 45% increase in value terms. However, Vietnam bucked this trend, with gold demand dropping by 20% compared to the same period last year.
The decline in Vietnam's gold demand was primarily due to a combination of local economic factors and a possible shift in investment preferences. While global gold demand was fueled by inflation fears, currency fluctuations, and safe-haven buying amid pandemic uncertainties, Vietnam's market dynamics may not have aligned with this trend.
Economic conditions and market confidence at the time may have influenced investor behavior in Vietnam. Although specific GDP growth data for 2021 was not readily available, economic uncertainty or stronger performance in other asset classes could have led investors to reduce gold investments locally.
Additionally, local events like flooding or other disruptions in Vietnam could have shifted consumer focus away from gold investment towards more immediate concerns. However, it's important to note that the flooding in northern Vietnam that occurred in 2025 is unlikely related to the 2021 data.
Vietnam's trade and tariff environment, including negotiations with the US and the impact on manufacturing and exports, can also influence investor confidence and liquidity available for alternative investments such as gold.
Despite the decrease in gold demand, the total value of gold investment in Vietnam rose by 12% year-on-year to $997 million in the second quarter. This suggests that while the quantity of gold purchased decreased, the price of gold may have increased, contributing to the total investment value.
Elsewhere in the world, the demand for gold bars and coins in the US halved to nine tonnes in Q2, while high gold prices and socio-political instability drove a sharp increase in gold investment demand in the ASEAN region. China's gold demand in Q2 was 115 tonnes, and India's gold demand increased to 46 tonnes. Europe saw a significant increase in net investment demand for gold, with a more than doubling to 28 tonnes in Q2.
In conclusion, while global gold demand rose in Q2 2021, Vietnam experienced a decline in gold investment demand likely due to localized economic factors, investor sentiment shifts, and possibly competing investment opportunities in a growing economy. The total value of gold investment in Vietnam, however, continued to rise, indicating a resilient gold market despite the decrease in demand.
Investors in Vietnam might have redirected their funds towards different investment opportunities in the growing economy, contributing to the decrease in gold demand. This shift in preference could potentially be witnessed in other sectors, such as the real-estate market or the finance markets.
In addition, the rise in total value of gold investment in Vietnam despite the decline in demand indicates a resilient gold market; thus, it's possible that AI-driven algorithms or sophisticated investors saw potential in investing in gold at higher prices, sustaining the market's growth in the region.
