Article Summary: On August 5, 2026, the State Bank of Vietnam announced a plan to increase its gold reserve ratio from the current 3% to 8% within three years, becoming another Southeast Asian nation after the Philippines and Thailand to significantly boost gold holdings. This move signals a deepening de-dollarization wave in the Asia-Pacific region, is expected to provide medium-to-long-term support for international gold prices, and will reshape the supply-demand dynamics of the regional gold market.
Southeast Asian Central Banks Spark New Gold Buying Wave as Vietnam Targets 8% Reserve Ratio
On August 5, 2026, the State Bank of Vietnam (SBV), in a medium-term monetary policy report submitted to the National Assembly, explicitly proposed increasing the proportion of gold reserves in official foreign exchange reserves from the current approximate 3% to 8% over the next three years. This move marks the spread of the Southeast Asian "de-dollarization" wave from countries like the Philippines and Thailand to Vietnam, a crucial manufacturing hub, injecting strong new momentum into the long-term structural demand of the Asia-Pacific gold market.
Policy Details: A 5-Percentage-Point Leap Over Three Years
According to the SBV's plan, the reserve increase will be implemented in phases. The first phase (second half of 2026) plans to purchase about 15 tonnes of gold, raising the reserve ratio to 4.5%; the second phase (2027) will add another 20 tonnes to reach 6.5%; finally, the remaining purchases will be completed by the end of 2028, bringing total gold reserves to about 80 tonnes and achieving the 8% target. Currently, Vietnam's official gold reserves stand at approximately 30 tonnes.
SBV Governor Nguyen Thi Hong emphasized in a subsequent statement that this decision is based on a prudent assessment of increasing global economic uncertainty and rising volatility risks of major reserve currencies. She noted: "Against the backdrop of profound geopolitical shifts and structural challenges facing the global financial system, gold's strategic allocation value as a non-sovereign, zero-credit-risk asset is becoming increasingly prominent. Increasing gold reserves helps enhance the resilience and stability of Vietnam's financial system."
Accelerating De-dollarization in Southeast Asia: A Chain Reaction from the Philippines to Vietnam
Vietnam's move is not an isolated event but a continuation of collective actions by central banks in the Asia-Pacific region, particularly Southeast Asian nations. In 2024, the Bangko Sentral ng Pilipinas took the lead in raising its gold reserve ratio to over 10%, drawing widespread market attention. Following closely, the Bank of Thailand announced a gold reserve target of 8% in 2025. The Bank of Korea made a one-time purchase of 25 tonnes of gold in the second quarter of 2025. The Bank of Japan also significantly increased its gold reserves to 5%.
Behind this series of actions lies the deep concern of Asia-Pacific emerging economies about the US dollar-dominated international monetary system. The significant fluctuations in Federal Reserve monetary policy, the continuous deterioration of the US fiscal deficit, and the risk of dollar "weaponization" in geopolitical conflicts are all prompting central banks to accelerate the diversification of their foreign exchange reserves. Gold, as a traditional safe-haven asset and recognized "hard currency," naturally becomes the preferred alternative.
Threefold Impact on the Asia-Pacific Gold Market
1. Physical Demand Side: Continuous Inflow of Structural Buying
Vietnam's accumulation plan implies approximately 45 tonnes of official gold purchase demand entering the market over the next three years. While this volume seems limited compared to the global annual gold production (about 3,600 tonnes), considering that global central bank net gold purchases are already at historical highs (exceeding 1,000 tonnes in 2025), any marginal increase could become a key marginal force driving gold prices higher. Especially in the London over-the-counter market, sustained buying by Asian central banks has become a crucial pillar supporting gold prices.
2. Regional Pricing Power: Enhanced Voice for the Asia-Pacific Gold Market
Following the Monetary Authority of Singapore's earlier release of its "Gold Market Blueprint," explicitly aiming to build a new Asia-Pacific gold pricing hub, and the successive introduction of gold-related policies by countries like Indonesia, India, and Vietnam, the Asia-Pacific region's role in the global gold market is shifting from "price taker" to "price maker." Vietnam's accumulation action further consolidates regional gold demand, helping to boost the influence of Asia-Pacific gold trading centers like Singapore and Shanghai in the global pricing system.
3. Investor Sentiment: The Safe-Haven Narrative is Reinforced
The continuous gold purchasing by central banks itself sends a strong safe-haven signal to the market. In early August 2026, international gold prices were already near historical highs above $2,700 per ounce, with market expectations for a Fed rate cut in the second half of 2026 continuing to heat up. The SBV's plan undoubtedly provides additional psychological support for gold prices, potentially attracting more institutional investors and private wealth to allocate to gold assets, especially with Asia-Pacific gold ETFs possibly welcoming a new round of capital inflows.
Potential Challenges: The Unique Nature of Vietnam's Domestic Gold Market
It is worth noting that Vietnam's domestic gold market has its unique characteristics. The Vietnamese public holds a deep cultural affinity and investment preference for gold, resulting in massive private gold holdings. In the past, the SBV imposed relatively strict controls on gold imports and trading to prevent capital outflows and exchange rate volatility. This significant increase in official reserves may interact with domestic regulatory policies. How to effectively manage the large private gold market while increasing official reserves, avoiding market distortions or speculative hype, will be a major test for the SBV.
Furthermore, the stability of the Vietnamese Dong exchange rate is a key consideration. Large-scale gold purchases could consume foreign exchange reserves and exert short-term pressure on the Dong's exchange rate. The SBV needs to strike a balance between increasing gold holdings and maintaining exchange rate stability, possibly adopting a gradual purchasing strategy and coordinating with other monetary policy tools for hedging.
Outlook: The Asia-Pacific Gold Market Enters a New "Policy-Driven" Phase
In summary, the SBV's latest decision marks the Asia-Pacific gold market entering a new phase actively driven by national policies. From India's "Gold Monetization 2.0" activating private gold, to Indonesia's new supply chain policy mandating domestic gold processing for exports, and to the Philippines, Thailand, and Vietnam explicitly raising reserve ratios, Asia-Pacific nations are intervening in the gold market with unprecedented intensity. Behind this lies not only hedging demand but also deep strategic considerations for competing for pricing power, optimizing reserve structures, and even promoting the internationalization of their currencies.
For investors, this trend means that when analyzing gold price movements, beyond traditional factors like the US Dollar Index, US Treasury yields, and Fed policy, the collective buying behavior of Asia-Pacific central banks must be incorporated as a crucial structural variable. For the foreseeable future, policy developments in the Asia-Pacific gold market will continue to be a key force influencing global gold prices.
