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Thailand: Gold Provides Liquidity Amid Pandemic

By Pawan Nawawattanasub, CEO, YLG Bullion International

Published on April 10, 2021

The global gold market was tested like never before in 2020. Covid-19 related lockdowns caused massive supply chains disruption, material shortages, and bottlenecks globally, and it was no different in Thailand, and had knock-on effects on the country’s precious metals sector.

The interruption of gold’s supply chains caused massive chaos in Thailand’s physical bullion market. Normally, the premium for importing and exporting gold in Thailand is US$1 to US$2, but the premium for exports had increased to over US$12 amid the pandemic, making the former spread of 100 Thai baht (US$3.24) insufficient to cover the cost and volatility in price movement. The spread widened to 300 Thai baht between March and May 2020.

Moreover, gold has traditionally been a popular way for Thais to save money, but the surge in global prices, coupled with the Thai baht’s weakness, has boosted the local gold price to an all-time high. This has also prompted an increase in the number of Thais who are flocking to gold shops to trade in gold jewellery and gold bars for cash, impacting businesses and the economy as gold hoarders cash in.

Thailand’s export value of gold grew by 75% from US$7.6 billion in 2019 to US$13.3 billion in 2020, according to Thai customs data. The rise was a result of growing exports as manufacturers profited from the global gold price, which rose continually throughout the year. In volume terms, the country exported 243.79 tonnes of gold in 2020 an increase of 42.63% from 170.92 tonnes of gold in 2019. Meanwhile, imports fell by 15.51% to 132.97 tonnes.

As a result of the higher local gold price and concerns over economic uncertainty, consumer demand for gold has been subdued, falling 275% from 46 tonnes in 2019 to net disinvestment of 81 tonnes in 2020.

OUTLOOK FOR 2021

With the rollout of Covid-19 vaccinations globally, there appears to be light at the end of the tunnel – a real possibility that the pandemic will be under control sooner rather than later. Similarly, in Thailand, we are expecting the economy to recover and expand by more than 3% this year.

However, there are still many challenges ahead that could derail the recovery of Thailand’s export-dependent Thai economy. These include new virus strains that could hinder the effectiveness of the current vaccines, the ongoing trade war between the U.S. and China, and more nations adopting trade protectionism amid the current global economic downturn.

A recent survey on Thai consumer behavior showed signs that the consumers spending is returning to pre-Covid 19 levels. However, consumption has been largely on essential items such as food and beverages, and not durable goods like electrical appliances and automobiles.

Travel related sectors remain badly hit. As tourism is an important growth engine of Thailand’s economy, the negative impact of fewer tourists has spilled over to many other sectors. The loss of income is widespread, and many households are facing financial hardship. At the same time, household debt, which registered around 84% of GDP at the end of last year, has been on the rise. Apart from taking up additional jobs (if they can find one) and borrowing, people have resorted to selling their gold jewellery and precious metals to raise desperately needed cash.

So far in 2021, we have continued to observe the selling of precious metals and gold across the country in a bid to raise cash for day-to-day living expenses. This trend will probably continue until Thailand, and the major economies, have the pandemic well under control and normal economic activities and travel can resume. However, the price pullback has also enticed some investors to replenish their vastly depleted holdings.

Furthermore, the pandemic has also led to the beginning of the “New Normal” in Thailand’s gold market. Following the crisis, many traditional services are at risk of being wiped out with the reduction of physical contact and growth of e-commerce, and this will certainly affect Thailand gold market as well.

PAWAN NAWAWATTANASUB is the CEO of YLG Bullion Singapore and the CEO and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, and is a SBMA Committee member.

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Lee Jia Yi

OPERATIONS & ADMIN EXECUTIVE
Before joining SBMA, Jia Yi worked as an Admin & Reporting Officer in her previous role. She holds a Diploma in Business & Social Enterprise from Ngee Ann Polytechnic. Jia Yi is responsible for managing and maintaining physical and digital files in SBMA, supporting invoicing processes, reconciling receivables and payables, coordinating meetings and conferences. Additionally, she will provide support to the team and assist the Business Director in managing the Association’s office operations and general administrative activities.

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Emily Oh

OPERATIONS & ADMIN EXECUTIVE
Emily Oh is the Operations & Admin Executive, a seasoned professional who values teamwork and effective communication. She is skilled at adapting to new challenges and takes a proactive and resourceful approach to every task. Before joining SBMA, Emily had experience coordinating international travel arrangements and spearheading community initiatives. Her role at SBMA will be providing operational and administrative support for projects and other matters to the team.

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Clara Chang

MARKETING & COMMUNICATIONS EXECUTIVE
Clara Chang joins SBMA as the Marketing & Communications Executive, enriching the team with her extensive experience in content creation, social media management, and digital marketing. Prior to joining SBMA, Clara held the position of Marketing Executive at her previous job. She holds two bachelor’s degrees from the University at Buffalo, one in International Trade and another in Geographical Information Science. Her core duties will include maintaining the SBMA website, managing the quarterly Crucible newsletter, among other responsibilities.

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Mr John Levin

Global Metals
TD Securities
John Levin is the Head of Metal Sales & Trading – APAC at the Toronto Dominion Bank’s Singapore office. Prior to this role, he devoted seven years to leading precious metal sales for the ANZ banking group in his home country, Australia. Notably, from 2009 to 2011, John played a significant role on the management committee of the London Bullion Market Association while serving as the Head of Precious Metals Sales for HSBC Global Banking and Markets in the UK.

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Fabian Lew

MARKETING & COMMUNICATIONS OFFICER

Fabian was a Business Development and Marketing Associate before joining SBMA. He graduated from Singapore Management University with a Bachelor’s degree in Economics.

He has joined SBMA since February, 2022.

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Margaret Wong

BUSINESS DIRECTOR

Margaret Wong, Business Director at SBMA (Singapore Bullion Market Association), brought valuable experience from her previous role at the World Gold Council (WGC). Her tenure at WGC provided her with extensive exposure to the gold community in Singapore and the broader region. This background has been instrumental in establishing strong working relationships within the industry.

Margaret’s role at SBMA encompasses a diverse range of responsibilities. She oversees office management, business support processes, finance, and administrative functions essential for the smooth operation of the team and management committee. Additionally, Margaret handles membership matters, member communications, and addresses public inquiries related to SBMA.

One of Margaret’s key responsibilities is coordinating with the Event Management Company for SBMA’s prestigious annual event, the Asia Pacific Precious Metals Conference. This flagship conference plays a crucial role in the industry, making her involvement pivotal in its success.

Described as resourceful and self-motivated, Margaret Wong brings a wealth of skills and experience to her role at SBMA, ensuring efficient operations and effective engagement within the precious metals community in Singapore and beyond.

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Albert Cheng

Chief Executive Officer

Albert Cheng joined the World Gold Council in March 1993 as a Regional Manager, becoming Managing Director, Far East in 2003. He retired at the end of March 2015 and was subsequently named its Advisor. He has also been an International Advisor to the Shanghai Gold Exchange since 2002.

His marketing career began with Dentsu Young & Rubicam, Hong Kong in the early 80’s. He began gold marketing in July 1985 when he joined the Royal Canadian Mint as a Regional Manager for Southeast Asia.

He was appointed honorary CEO of SBMA in November 2015. He is responsible for the success and strategic development of SBMA, represents the interests of the Association, and is responsible for all the legal and regulatory aspects of the work of the Association. He is the primary contact for regulators and government bodies on bullion market development.

Ms Pawan Nawawattanasub

Ms Pawan Nawawattanasub

CEO
YLG Bullion Singapore Pte Ltd

Pawan is the CEO of YLG Bullion Singapore and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, the Thailand Futures Exchange’s Arbitration Committee, and the Rotary Bangkok committee. She holds a master’s degree in Political Science.

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Mr Shaokai Fan

Head of Asia-Pacific (ex China) and Global Head of Central Banks
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Shaokai Fan is the Global Head of Central Banks at the World Gold Council, responsible for advising governments on gold matters, and enhancing the gold market through engagement, dialogue, and thought leadership. He works directly with central banks and sovereign wealth funds on investment considerations. Prior to this position, Shaokai held multiple roles at Standard Chartered Bank, including Director for Asia Strategic Initiatives and Associate-Director for Public Sector coverage. Shaokai holds a Masters of Public Administration from Columbia University and the London School of Economics, and an undergraduate degree in finance and economics from New York University.

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Mr Alan Liew

Head of Bullion & Commodities Trading
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Alan is Head of Bullion and Commodities Trading for Group Trading in Global Markets, United Overseas Bank (UOB). Alan joined UOB and started the bank’s commodities trading business in 2014, previously he spent eight years in Standard Chartered Bank (SCB) trading both precious and base metals. During his tenure at SCB, he obtained the SGE gold trader licence and was part of the pioneering team for the SGE business and the FX quantitative trading team. Prior to trading, he worked for Monetary Authority of Singapore in the Financial Risk Management Division. He holds a BSc (Hon) in Computer Science at National University of Singapore and a MSc in Financial Engineering at Nanyang Technological University.

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Mr Nikos Kavalis

Managing Director
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Mr Nuttapong Hirunyasiri

CEO
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Mr Raman Walia

Executive Director, Head of Commodities Sales – APAC
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Raman is Executive Director and Head of Commodities Sales, APAC, for J.P. Morgan. He joined JPMorgan in 2008 in New York, moved to Singapore in 2011, and helped expand the precious metals business in the region. Raman has an MBA from Cornell University, and likes to travel in his spare time.

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Mr Andrew Clarke

Head of Brink’s Global Services
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Mr Kazuya Naoki

Head of Metals, Asia
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Kazuya (Kaz) Naoki is the Head of Metals, Asia of ICBC Standard Bank in Singapore and is responsible for the precious & base metals sales and trading in the region. He joined Standard Bank Plc Tokyo Branch in 2008 and was relocated to its Singapore Branch in 2013 whose controlling stake was acquired by the Industrial and Commercial Bank of China in 2015. Prior to joining Standard Bank, Kaz spent 11 years focusing on commodity trading and risk management with Mitsui & Co in Tokyo, Sydney and London. Kaz has been serving on the SBMA Management Committee since 2016.

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Mr Vinh Nguyen

Head of Precious Metals, Asia
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Vinh Nguyen joined StoneX Group in Singapore at the beginning of 2008 and responsible for its APAC precious metals activities since 2019 until now.

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Mr KL Yap

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