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Published on October 3, 2007

Gold Traders' Association of Thailand president Jitti Tangsithpakdi said that if the baht depreciates in value against the US dollar, the local price of gold could reach Bt13,500 per one-baht weight (15.16g).

The global spot gold price hit a nearly 28-year high of $747.80 an ounce yesterday. However, the local price remains below the 27-year high of Bt13,000 per baht-weight recorded on May 19, 2006, because the Thai currency is stronger now than it was at that time.

The local gold price yesterday was at Bt12,350 per baht (the Thai measurement standard equivalent to 15g) -weight for ornament gold and Bt11,950 for bullion, he said.

"The gold price has been volatile over the past month, so people who are interested in piling up gold for investment should be more prudent. The baht's appreciation will limit the increase in the local gold price. However, if the baht becomes weaker, we may see a local gold price of Bt13,500," Jitti said. "Changes in foreign political sentiment may boost the gold price further. If it breaks the $750 barrier, it may rise to $800 an ounce."

The higher price has reduced the number of gold transactions more than 10 per cent over the past few years, as people have been selling gold rather than buying it, he said. To boost their income and offset the lower number of gold transactions, local gold traders have been exporting gold.

Last month alone, Thailand shipped Bt2 billion worth of gold abroad.

"The issue causing most concern is that goldsmiths have no jobs, because people are taking a profit by selling gold, but they are not buying gold. If the situation continues, a large number of goldsmiths may be redundant," he said.

The Nation