Gold demand in Vietnam, which consumes more of the precious metal per head than India and China, is set to surge as the third devaluation [of the dong] in the past year and a stock market slump combine to spur sales.

"People will switch to gold as a shelter," said Le Xuan Nghia, vice chairman of the National Financial Supervision Commission, which advises Prime Minister Nguyen Tan Dung. "The current situation with the dong will spur people to increase their gold holdings."

The government devalued last week to boost exports and shore up the nation's trade deficit, driving the dong to a record low. Vietnam's benchmark stock index has slumped into a so-called bear market, plunging by more than 20 percent from a May high. Gold priced in dollars reached a record in June on concern that the global recovery may falter.  Continue Reading