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Published on March 21, 2008

The sharp fall of Bt1,000 per 15 grams is the steepest in 29 years for local traders, said Gold Traders Association of Thailand president Jitti Tangsithpakdi.

Besides gold, which dropped 2.8 per cent to US$917.91 (Bt28,800) per ounce in Asia, oil and other commodities as well as stocks have also fallen, due to fears of US economic turmoil following the sub-prime mortgage crisis.

"With volatility increasing, it's more difficult to assess prices even in the short term," Jitti said.

However, some fund managers see the cave-in in global commodity prices, particularly for oil, gold and heavy metals, as simply a short-term correction.

"When someone in China trades his bicycle in for a motorbike or even a car, it's very unlikely he'll revert back to cycling," said Picha Ratanatam, head of investment, mutual funds and private funds at Tisco Asset Management.

Although hard assets have taken a plunge, with oil sinking as much as 4.5 per cent on Wednesday, drops in soft-commodity prices are only blips. CP Intertrade president Sumeth Laomoraphorn believes the current commodity bull run is unlikely to peter out any time soon.

Somruedi Banchongduang,

Ki Nan Tsui

The Nation