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Gold consumption reaches 19.2 tonnes in Q1
Viet Nam's gold consumption increased by 2 per cent, reaching 19.2 tonnes during the first quarter of 2011, according to a World Gold Council report released earlier this month.
Demand for gold was valued at US$878 million, a 28 per cent increase compared to the same period last year.
Jewellery demand increased by 7 per cent (around 5 tonnes) during the first quarter while investment demand went up by 1 per cent, reaching 14.2 tonnes.
Domestic gold prices hovered at a two-week high of VND37.5 million ($1,829) per tael yesterday, an increase of VND120,000 per tael against last Friday. (One tael is equivalent to 1.2 ounces.)
Gold dealers quoted purchase/selling prices at VND37.41-37.53 million per tael.
The appearance of impure gold alloys (Capable of cheating most purity testing equipment as well as skilled goldsmiths) on the market over the past five weeks had jewellery companies scrambling to minimise losses.
"Although wolfram integrated gold alloys have appeared in many other countries for years, it's its first time in Viet Nam," said Phan Truong Thi, head of the Precious Gemstones and Jewellery Institute.
Some gold traders reported gold bullion sales slipping by 30-50 per cent during the last four weeks. Gold traders have been advised to cut out gold alloys for testing.
According to the World Gold Council, the global demand for gold during the first quarter of 2011 increased by 11 per cent to 981.3 tonnes valued at $43.7 billion, an increase of almost 40 per cent. The quarterly average gold price hit a new record of $1,386.27 per ounce, its eighth consecutive year-on-year increase.
Continued strong demand for gold was driven by investors, jewellery buyers and central banks due to uncertainty regarding the US economy and the state of the dollar, ongoing European debt concerns, global inflationary pressures and continued tensions in the Middle East and North Africa, the council said.
While the demand for gold had been rising, gold supply has declined by 4 per cent to 872.2 tonnes due to a sharp increase in purchasing by the official sector as well as a fall in the supply of recycled gold, which dropped by 6 per cent to 347.5 tonnes.
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