Investment split deepens in 2025 as Thai shares slide and gold surges into 2026

Thailand’s investment landscape in 2025 became one of the clearest examples of a market “split”, with Thai equities delivering the weakest returns among major asset classes. The Stock Exchange of Thailand (SET) Index was down more than 10% from the start of the year.

By contrast, gold kept setting fresh records throughout 2025, rising by more than 50% from the start of the year to nearly 67,000 baht per baht-weight of gold, reinforcing its role as a leading safe-haven asset.

Overall, 2025 reflected a shift in investor behaviour away from chasing returns in risk assets and towards protecting wealth and diversifying risk. Gold emerged as the year’s winner, while Thai equities remained defensive, waiting for clearer signals of a recovery.

Thai equities: a year of volatility and defence

Throughout 2025, the Thai stock market faced high volatility, underlining the reality that the domestic economy has yet to stage a meaningful recovery. From the start of the year to December 19, the SET Index traded in a wide range across 235 sessions.

It hit a high of 1,390.88 points early in the year before sliding to a low of 1,062.78 points on June 26, 2025—its weakest level versus the five-year average.

Although the index saw a short-lived rebound in the second half, the year-to-date return still stood at -10.57%, highlighting structural pressures that have yet to ease—particularly the absence of a clear return in confidence from foreign and institutional investors.

Over a longer horizon, Thai equities remained soft: the one-year return was down 9.10%, while the three-year and five-year returns were deeper in the red at 22.62% and 15.53%, respectively. Even though the latest six-month return was up more than 17%, it was not enough to reverse the broader trend.

Liquidity remained sizeable, with total turnover of more than 9.62 trillion baht over 235 sessions, or roughly 40.9 billion baht a day on average. However, the flow structure pointed to fragility.

Domestic investors were the only net buyers, with combined net purchases of more than 156 billion baht. Foreign investors continued to post net sales of more than 108 billion baht, while institutions sold around 36 billion baht and brokerage proprietary accounts sold roughly 12.3 billion baht.

That picture suggests the market in 2025 relied largely on “domestic money” to support the index, while capital outflows from overseas investors continued.

On valuation, Thai equities were not expensive versus history, with the market trading at around 15.35 times earnings and 1.18 times book value, and offering an average dividend yield of 3.73%.

Even so, those numbers have not been enough to attract fresh inflows while the economic outlook and listed companies’ profit growth remain unclear. Earnings per share stood at 81.58 baht, and turnover remained below levels seen during previous bull markets.

Another signal of the subdued environment was the slowdown in IPOs. In 2025, only 18 listings raised funds on the SET and mai, down sharply from 32 the year before.

The contraction did not only hit underwriting fees—it also reflected companies’ hesitation to tap capital markets in an environment where valuations remain challenging.

Overall, 2025 was a year of “defence” rather than growth for Thai equities. Limited foreign support, weaker IPO activity, and negative long-term returns all point to structural challenges that still require a new catalyst—whether economic, investment-related, or confidence-driven.

Gold’s uptrend may not be over: 2026 could still deliver gains

Gold remained firmly in focus after an exceptionally strong 2025, repeatedly setting fresh highs before a brief profit-taking phase in October. Worachai Tangsitphakdi, deputy secretary-general of the Gold Traders Association, said the domestic gold price in 2026 could still rise by at least around 10%.

He projected Thai gold prices could move towards 69,000–71,000 baht per baht-weight of gold, depending on the baht and global interest-rate direction.

Speaking to Thansettakij, Worachai said domestic prices stayed elevated throughout 2025, peaking at 67,400 baht per baht-weight on October 17, before correcting to around 59,750–60,000 baht—an 11% decline in just 10 days—driven by profit-taking after the US Federal Reserve (Fed) chair signalled that rate cuts would not necessarily come in an uninterrupted sequence.

Prices later recovered to around 64,400 baht. Even on that basis, gold still posted a gain of about 51% in 2025—well above the 8–10% annual rise many analysts typically expect.

Data from the Gold Traders Association showed that at the start of 2025, domestic gold bullion was priced at 42,650 baht per baht-weight, with spot gold at US$2,624.50 an ounce and the baht averaging 34.34 per US$1.

At the October peak, spot gold jumped to US$4,372 an ounce and the baht strengthened to around 32.55 per US$1, lifting the domestic gold price by 24,750 baht—an increase of 58% in under a year.

Worachai said the October pullback looked like a pause after an outsized rally, compounded by selling from some funds and institutions. Over the longer term, however, many major investors and large banks still expect the Fed could resume rate cuts—particularly if US politics becomes a key variable.

For the remainder of 2025, he said prices could soften slightly on year-end selling or profit-taking, but were unlikely to fall below 63,000 baht due to geopolitical risks—especially the unresolved Middle East conflict—while the Fed’s rate direction remains on a downward path, which typically supports gold.

Looking ahead to 2026, Worachai said gold remains an attractive diversification asset, but should be bought with “patient capital”. Many analysts still see potential for new record highs, supported by expectations of one or two further Fed cuts as interest rates and inflation move closer.

He added that major financial institutions such as Goldman Sachs and Bank of America have projected spot gold could be in the US$4,900–5,000 range by the end of 2026, supported by central bank buying. Over the past three years, central banks have held gold at an average of more than 1,000 tonnes a year, with China among the key buyers.

If the baht strengthens towards around 30 per US$1, domestic prices could still climb into the 69,000–71,000 baht range. 

That aligns with market expectations of at least a 10% rise in 2026—though a widening of geopolitical tensions, such as renewed friction between China and Taiwan, could push prices higher than forecast.