Association president Jitti Tangsithpakdi said last week that gold traders faced many problems this year from fluctuating gold prices on the world market.

The oil price rise and international speculators are mainly responsible for the increased value of gold, Jitti said, adding that this had lowered the demand from domestic consumers, which had brought down trading growth this year.

With the gold price climbing, domestic gold sales have dropped 30 to 40 per cent, forcing about 40,000 goldsmiths to abandon the business.

In May this year the gold price on the world market was recorded at a record high of US$719 (Bt26,230) per ounce, while the domestic gold price hit Bt12,900 per baht weight (15.24 grams).

The price on the world market was $623.4 per ounce last Thursday, while the domestic price was Bt10,750 per baht weight.

Gold imports this year have also dropped from last year by 40 per cent from 140 tonnes to lower than 100 tonnes. This was because of a slowdown in the domestic market.

The Commerce Ministry reported that the country had imported 91.28 tonnes of gold in the first 11 months of this year, down from 128.37 tonnes in the same period last year.

Jitti said that although the upcoming New Year period normally increased gold-trading, this year trade would be worse than expected because consumers had lower purchasing power compared to the high gold price.

The association forecasts that the world market price for gold will continue to climb next year.

"The gold price will go above $700 per ounce in the first half of next year but is expected to decrease in the second half," said Jitti.

The baht's appreciation against a weak US dollar and high demand in the world gold market will cause gold prices to jump. This environment has led many countries to stock up on gold instead of US dollars. Jitti said the expectation of a gold-price rise in the long run had prompted gold prices to soar.

However, Jitti was optimistic that next year domestic gold-trading would recover because of a more stable political situation and rising purchasing power.

Petchanet Pratruangkrai

The Nation