Southeast Asia Gold Market

Southeast Asia Gold Market Continues to See Robust Demand

Recently, the World Gold Council released its Q1 2025 Global Gold Demand Trends Report, revealing that the Southeast Asian gold market is experiencing an unprecedented surge. Singapore’s gold demand soared to a peak not seen since 2010, reaching 2.5 tonnes in the first quarter of this year—a 35% year-on-year increase. Meanwhile, Indonesia, Malaysia, and Thailand also witnessed rising investment interest in gold during the first quarter, with demand climbing to 8.9 tonnes, 2.5 tonnes, and 7.4 tonnes, marking increases of 35%, 34%, and 25%, respectively. Globally, total gold demand in the first quarter of 2025 increased by 1% year-on-year to 1,206 tonnes. Against the backdrop of gold prices breaching the historic high of $3,000 per ounce, demand has not fallen but risen, demonstrating the market’s strong vitality.

The surge in Southeast Asia’s gold demand is, in essence, a collective response by the public and governments to economic risks. Taking Vietnam as an example, in 2024, a state-owned bank in Vietnam had to implement purchase restrictions after selling 2 tonnes of gold in a single week—a volume equivalent to one month’s typical sales. Concurrently, Thailand saw a 10% year-on-year increase in demand for gold bars and coins, with long queues outside gold shops becoming commonplace. Amid persistent price increases and uncertainty over tariff policies, gold, as a traditional safe-haven asset, has become the preferred choice for the public to hedge against wealth erosion.

Profound shifts in regional economic structures are also driving the gold market’s momentum. Vietnam’s real estate market has experienced a significant decline in transaction volumes, accompanied by lower savings interest rates, forcing substantial capital to flow into the gold market. In Thailand, investors have broken the conventional “sell-high” approach, increasing their holdings even as gold prices rise—an anomaly that reflects deep concerns about the economic outlook. As the World Gold Council notes, escalating geopolitical conflicts and the reshaping of global supply chains have further reinforced gold’s role as a safe-haven asset.

At the national level, central banks’ strategic choices are equally significant. In 2024, global central banks’ net gold purchases exceeded 1,000 tonnes for the third consecutive year, with Southeast Asian central banks accelerating their gold acquisitions. This trend is closely linked to the diminishing credibility of the U.S. dollar. The Federal Reserve’s interest rate hikes and balance sheet reduction have prompted emerging markets to diversify their foreign exchange reserves. Survey data indicate that over 80% of central banks plan to continue increasing their gold reserves over the next 12 months.

Traditional culture and market fragmentation form the unique regional logic of Southeast Asia’s gold demand. In Malaysia, the gold jewelry worn by brides in traditional weddings serves as an important symbol of family status. In Thailand, the golden decorations of Buddhist temples and festive activities generate substantial gold demand. In Vietnam, the quantity of gold worn signifies social standing. These cultural factors endow gold with social functions that go beyond its role as an investment asset.

Economic differentiation has shaped distinctive market dynamics in different countries. Vietnam and Thailand’s gold markets are primarily driven by safe-haven demand. Although the State Bank of Vietnam’s gold sales temporarily suppressed prices, the stagnation in the real estate market and currency depreciation pressures persist. Thailand’s “buy-as-it-rises” phenomenon reflects public concerns about the ineffectiveness of policy tools. In Indonesia and the Philippines, the demographic dividend of a young population and the rise of live-streaming e-commerce platforms like TikTok are lowering barriers to gold purchases, further activating market potential. This fragmentation illustrates that in Southeast Asia, gold is not only a cultural symbol but also a channel for alleviating economic pressures. When traditional investment avenues like real estate and the stock market lose their appeal, gold becomes the common choice across social strata.

The gold rush in Southeast Asia is not an isolated phenomenon but an integral part of global capital flows. In the second half of 2024, as expectations for Federal Reserve rate cuts intensified, gold’s appeal as a “zero-yield asset” became increasingly prominent. Entering 2025, spot gold prices surpassed 2,900 per ounce, while futures prices on the COMEX briefly touched the 3,000 per ounce mark. Goldman Sachs raised its year-end price target to 2,700–3,000 per ounce, and UBS even projected a long-term gold price of $4,000 per ounce.

Asian demand is reshaping the global gold pricing system. Southeast Asia’s contribution to global gold demand increased from 10% to 15% in 2024, driving Asian household purchases to account for 45% of global demand. This shift is attributed to the expanding middle-income population and growing financial literacy in Southeast Asia, positioning the region as a new growth engine. However, the complexity of regional markets cannot be overlooked. Japan attracted a large number of foreign tourists to buy gold due to the depreciation of the yen, while Thailand, with its 96.5% gold purity standard differing from the 99.99% standard, was unable to replicate this success.

Nevertheless, the Southeast Asian gold market’s boom harbors multiple underlying risks. Some experts warn that international capital could inflate a bubble by driving up gold prices, echoing the pattern of the 1997 Asian Financial Crisis, while inherent flaws in local markets could also trigger a bubble. Additionally, if individuals borrow to purchase gold and prices subsequently fall, it could lead to a severe debt crisis. More notably, Southeast Asian countries have limited monetary policy space, making it difficult for them to independently withstand the impact of the U.S. dollar cycle.

The World Gold Council predicts that gold prices in 2025 may exhibit a “positive but moderate upward trend,” though risks such as interest rate volatility and weak consumer demand cannot be ignored. For Southeast Asia, the key to transforming the “gold rush” into sustainable growth momentum lies in striking a balance between cultural traditions, technological innovation, and risk prevention. This challenge is not only about regional economic stability but also a critical test of economic governance capabilities.

Source: Southeast Asia Financial Industry Association