Anxiety over currency devaluations against the US dollar, inflation fears, and geopolitical tensions is driving a rush for gold among consumers in Vietnam and Thailand. Scenes of long queues outside banks in these Southeast Asian nations underscore a growing unease about economic stability.
“People are trying to protect themselves against local currency depreciation,” explained Michael Langford, a commodities and financial markets expert based in Singapore. “With inflation and currency devaluation working against them, buying gold is seen as a way to safeguard savings.”
This surge in demand has propelled gold prices upwards over the past six to twelve months, with significant interest also observed in China, where concerns over property and stock market volatility have bolstered gold’s appeal as a safe-haven asset.
Central banks are also joining the rush, ramping up their gold purchases to unprecedented levels. The World Gold Council reported that over 80% of central banks plan to increase their gold holdings in response to heightened geopolitical risks and macroeconomic uncertainties.
Despite traditional market expectations that high US interest rates would suppress gold prices, the metal’s sustained strength reflects broader concerns about global inflation and economic instability, noted Shaokai Fan, head of central banks and Asia-Pacific at the World Gold Council.
In Vietnam and Thailand, the demand for gold has reached fever pitch. In June, Vietnamese banks faced such overwhelming demand that they had to limit purchases to 1 tael per buyer and implement online registration systems to manage queues. Similar scenes unfolded in Thailand, where consumers flocked to gold shops amid softening stock market conditions.
Huynh Trung Khanh, vice-chairman of the Vietnam Gold Traders Association, highlighted how gold bars have become a primary investment vehicle amidst concerns over plummeting savings rates and currency devaluation. The Vietnamese dong has depreciated approximately 10% against the US dollar since 2022, further fueling gold’s appeal.
In Thailand, Nuttapong Hirunyasiri, managing director of MTS Gold Group, noted a significant shift in consumer behavior, with Thais buying gold even as prices climb. This trend has been exacerbated by economic uncertainties and a weakening Thai baht.
While Southeast Asia experiences this gold rush, stable economies like Singapore have seen less pronounced movements. Nonetheless, some local retailers report consistent gold purchases as a precaution against potential economic shifts.
The region’s rush for gold underscores a broader trend towards safe-haven assets amid uncertain economic conditions, reflecting a deep-seated concern about the future stability of regional currencies and economies.
