Gold In Vietnam | Gainesville Coins

7. Vietnam

By Gainesville Coins
Published June 24, 2015

vietnam flag

2013 Demand: 92.2 tonnes

Jewelry/Coin & Bar Demand: 11.9 tonnes/80.3 tonnes

Reserves: ~9-10 tonnes

% of Total Forex Reserves: 1.26%

2013 GDP: $359 billion

D^g:GDP: 1.17%


Gold has long enjoyed a special status in Vietnamese culture; yet, particularly for those families for whom the memory of hyperinflation and instability in their financial system is vivid, gold also represents a more durable, trusted vehicle of wealth (a safe haven). Unfortunately, this places the Vietnamese government in a similar predicament to India; the persistent weakening of their currency is compounded by a negative trade deficit—largely fueled by the large inflow of gold.

State Interests:

jewelry in vietnam

Much like India, Vietnam generates significantly more demand for gold than is in the interest of the state, which is trying to rescue its currency from an ongoing downward spiral. In 2013, the Vietnamese government began making private gold purchases more difficult, tightening rules about gold deposit accounts with banks and assuming control of the country's gold bar trade. The authorities have also been considering gold confiscation, or what has been more tenderly deemed, “gold conversion.” Presently, state-owned banks have been auctioning off gold bars to the public, attempting to salvage profits while satiating the public's demand for gold.

Commercial Interests:

With the restrictions on acquiring gold in Vietnam, it has become more difficult to buy gold within the country, which has generally always been a net-importer of gold in the past. Consequently, there is an enormous premium (over $200 per troy oz) on gold within the country, even for over-the-counter gold products. This premium continues to widen as the Vietnamese currency, the dong, becomes increasingly devalued and loses its purchasing power. The nationalization of the gold bar trade, through the state-owned Saigon Jewelry Company, is an attempt to curb this currency depreciation.

vietnam dong

Civilian Uses:

Vietnamese citizens privately hold some 300-400 tonnes of gold. For some perspective, this represents the same amount than the national gold reserves of the United Kingdom. Vietnamese demand for gold has been strong in recent years, leaping forward in 2013—probably due to the sharp drop in the gold price, which made the precious metal somewhat more affordable for average families. While jewelry is certainly valued in Vietnam, the vast majority of demand for gold came in the form of coins and bars (80.3 tonnes out of 92.2 tonnes of total demand). To illustrate the level of “gold fever” in the country, during 2012 the Vietnamese people nearly bought more gold per capita than the peoples of China and India combined. Oftentimes, with large assets such as real estate, Vietnamese citizens will even denominate prices and make payments in gold.

Did You Know?

While Vietnam is familiar with many of the styles of jewelry that are common to Southeast Asia and the surrounding regions, its most distinctive form of gold is the tael bar, borrowed from the Chinese. Tael is also a unit of measure for gold weight, equivalent to 37.34 grams (which is greater than one troy ounce). The Vietnamese foreign exchange reserves of gold are recorded in terms of tael, and are likely kept in 5 tael bars of .999 fineness, the standard on the thriving Hong Kong and Shanghai exchange markets. Vietnam is also known for producing investment grade bars, such as the Mot Luong. While these bars conform to the western style of gold bullion in terms of shape and purity, they do not conform to standard troy measurements of weight.

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