Gold shops face liquidity crisis as rising price tempts people to cash in
The price of gold continues its rising trend and could soar beyond the Bt27,100 mark it hit eight years ago, Gold Traders Association president Jitti Tangsitphakdi said.
“As the global economy has slowed down, the demand for gold has risen because people view it as a safer asset than cash,” he said.
“Gold price this year could rise beyond Bt27,000 per baht weight, which will be a new high in eight years. However if the Covid-19 situation improves, the global gold price could gradually come down.”
As for the domestic market, the gold price has risen since New Year by Bt4,500 to Bt6,000 per baht weight, causing gold investors to sell their bars and jewellery for profit. “Another factor is that the Covid-19 situation in Thailand has driven some people to reserve cash for daily needs instead of gold,” he added.
“Many gold shops are suffering due to cash-flow problems as people are rushing to sell their gold but not many people are buying,” said Jitti. “Besides, international traders have not been able to export gold due to a shutdown of airlines and overseas markets.”
“We advise investors to postpone the selling of gold at the moment to allow time for gold shops to restore their cash flow,” he added. “If the situation persists, some gold shops may have to temporarily shutdown, which will affect several employees in gold-related businesses.”
As of Tuesday, the purchase price of gold bars was Bt25,900 per baht weight and selling price was Bt26,100, while buying price for gold ornaments was Bt25,574.92 and selling price Bt26,750. This marks a 21.11 per cent jump, or Bt4,550, from December 31, 2019 when selling price of a gold bar was Bt21,550.