The report pointed out that Việt Nam registered the strongest bar and coin demand in the first quarter of this year since 2015, at over 14 tonnes.

Việt Nam experienced a 12 per cent year-on-year rise in demand for gold bars and coin investments, with total consumer demand increasing by 6 per cent year-on-year

Local investors were attracted by gold’s outstanding performance during the quarter, particularly in the face of rising energy prices – which are expected to fuel inflation – and local currency depreciation against the dollar, according to the World Gold Council. Premiums on gold bars reportedly reached a record of US$650 per tael in the quarter.

However, demand for gold jewellery in the first quarter in Việt Nam registered a fifth consecutive year-on-year decline. Demand was 10 per cent lower at four tonnes – the lowest first quarter since 2015.

Despite a flurry of demand in February around Tết (the Lunar New Year celebrations and God of Fortune Day), demand was heavily impacted by the high price of gold.

In the global market, the total global gold demand (inclusive of over-the-counter purchases) was up 3 per cent year-on-year to 1,238 tonnes, marking the strongest first quarter since 2016.

Healthy investment from the OTC market, persistent central buying and higher demand from Asian buyers helped drive the gold price to a record quarterly average of $2,070 per tael, 10 per cent higher year-on-year and 5 per cent higher quarter-on-quarter.

Central banks continued to buy gold apace, adding 290 tonnes to official global holdings during the quarter. Consistent and substantial purchases by the official sector highlight gold's importance in international reserve portfolios amidst market volatility and increased risk.

“Currency devaluation was a common theme among the ASEAN markets. This fuelled safe-haven/wealth-preservation demand for gold, as well as attracting investors with superlative returns in local prices,” Shaokai Fan, head of Asia-Pacific (ex-China) & global head of Central Banks at the World Gold Council said.

According to Louise Street, senior markets analyst at the World Gold Council, since March the gold price has climbed to all-time highs, despite traditional headwinds of a strong US dollar and interest rates that are proving to be 'higher for longer'.

“A number of factors are behind the recent surge including heightened geopolitical risk and ongoing macro- economic uncertainty driving safe-haven demand for gold. In addition, the continued and resolute demand from central banks, strong OTC investment and increased net buying in the derivatives market, have all contributed to the higher price of gold,” Louise said.

“Looking ahead, 2024 is likely to produce a much stronger return for gold than we anticipated at the beginning of the year, based on its recent performance. Should the price level off in the coming months, some price-sensitive buyers may re-enter the market and investors will continue to look to gold for a safe haven asset as they seek clarity around rate cuts and election results.” — VNS