The decreasing value of gold is likely to prompt the biggest consumer of the precious metal in Southeast Asia to reduce demand for it by more than 50 percent, states an association cited by Bloomberg.
The monetary unit of Vietnam has stabilized and the nation's leadership has tightened restrictions, which also will slash demand, chairman Nguyen Thanh Long with the Vietnam Gold Traders Association said. The prediction is consistent with the reduced demand for the yellowish metal in Asia, from where more than 50 percent of the demand hails.
"When the economy was unstable and inflation high, people only trusted gold," the chairman told the news source during an interview. "Now people are seeking investment in stocks and property, and even simply depositing money at banks can give them good returns so demand has dropped sharply."
At 8:59 a.m. on Wednesday, gold futures moderately slid 0.36 percent, a $4.70 loss to $1,289.67.
Reuters reports demand for bullion in India is likely to surge during the coming years following the election of Narendra Modi as prime minister. He is considered to be pro-gold and noted bullion policy should be for the benefit of traders and the public rather than economics.
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