Gold traders insist baht’s rise not driven by gold trade

The Bank of Thailand (BOT) convened a meeting with gold traders on Monday (September 15) to discuss measures to ease pressure on the baht caused by gold transactions.

The central bank is encouraging more domestic gold trading in US dollars to reduce upward pressure on the currency, while closely monitoring baht-denominated trades to prevent irregular or unlawful activity.

Pimphan Charoenkhwan, Assistant Governor for the Financial Markets, said the baht has appreciated by around 7% since the start of the year, the strongest among regional currencies. She attributed the gains to a larger-than-expected current account surplus and persistently high global gold prices.

To mitigate the impact, the BOT invited the Gold Traders Association to explore solutions, including shifting more local transactions into dollars.

The central bank also asked gold shops to step up surveillance of baht-based transactions, particularly investor behaviour that could influence exchange rates, while guarding against possible illegal activities.

The BOT said it would consider further proposals from the association and gold retailers to help minimise volatility and support policy deliberations by relevant agencies.

Jitti Tangsitpakdee, chairman of Chin Hua Heng Goldsmith and president of the Gold Traders Association, voiced strong opposition to a possible Bank of Thailand plan to impose a tax on online gold bar transactions.

He said such a move would inevitably hurt the gold industry, undermining efforts to position Thailand as a regional hub for gold and jewellery in ASEAN. It would also impact small-scale buyers who purchase gold as a safe-haven asset for savings and investment diversification.

“The association will continue to review details discussed with the Bank of Thailand, but we maintain that the baht’s appreciation has nothing to do with gold. The real factor is the US dollar, which has been shaken by President Trump’s tax policies, fuelling volatility across global financial markets,” Jitti said.

Gold firms back cooperation but reject baht link

Tipa Nawawattanasub, chief executive of YLG Bullion & Futures, insisted that the recent strength of the baht has little to do with gold trading.

Responding to calls from some economists that all transactions should be settled in US dollars to avoid exchange-rate pressure, she said studies have shown that gold exports affect the baht only marginally.

Many traders are already working with commercial banks to facilitate gold purchases and sales in US dollars through e-FCD accounts, which have become a popular investment channel this year.

Tipa argued that the dollar’s weakness, driven by US monetary easing, concerns over the Federal Reserve’s independence, rising public debt, and policy uncertainty, is the key factor sustaining baht strength. This global “Sell America” trend and de-dollarisation, she added, will likely continue.

As a result, forcing all gold trading into dollars would not guarantee slower baht appreciation. Instead, such a move could harm Thailand’s gold industry and undermine savings options for small investors.

“It would not solve the currency issue, but it would hurt both large and small operators in terms of business activity and employment. Limiting trading channels could also make gold harder to access for ordinary savers and weaken its role as a popular investment asset,” she said.

Thailand remains top gold exporter 

YLG Bullion International reported that although Cambodia has domestic gold mines, most are operated by foreign firms, and extracted gold is typically shipped abroad for refining. As a result, Cambodia relies heavily on imports, sourcing most of its gold from Singapore and, second only to that, from Thailand.

For more than a decade, Thailand has consistently ranked among Cambodia’s top gold suppliers in ASEAN, alternating between first and second place with Singapore. According to Customs Department data for July 2025, Thai gold exports to Cambodia accounted for 41.6% of the country’s gold shipments within ASEAN.

From January to July, Thailand exported 21,070 kilograms of gold to Cambodia, down 12% from the same period last year, but still the highest among ASEAN nations. In June–July alone, exports reached 20,257 kg, representing a year-on-year drop of 11.76%. Overall, total Thai gold exports in the first seven months amounted to 78,075 kg, up 31.68% from a year earlier.

However, imports grew even faster. In the same period, Thailand imported 187,848 kg of gold, an 82.53% increase from last year.

YLG CEO Pawan Nawawattanasub said the figures underline that Thailand has remained a net gold importer for five consecutive years, after briefly being a net exporter in 2019–2020 during the COVID-19 pandemic.

She highlighted three key points:

• Gold imports this year have risen at a faster pace than exports compared with 2024.
• Exports accounted for just 29.36% of total trade volume (imports + exports), signalling a downward trend in the share of exports.
• The data reflects sustained strong demand for gold in Thailand.

The increase in imports relative to exports, Pawan added, could worsen Thailand’s trade deficit, as more US dollars are required to finance gold purchases. “This trend exerts downward pressure on the baht rather than supporting its appreciation,” she said.