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The Recovery of Thai Gold Demand and its Saving Scheme

By Pawan Nawawattanasub, CEO, YLG Bullion Singapore

Thailand is one of the largest consumers of gold among ASEAN countries. Although the country experienced a temporary dip in gold demand in 2020 due to the pandemic, it also recovered very quickly in the following year. In 2022, the annual consumer demand increased by 3% in 2022, to 37.9 tonnes.

Source: World Gold Council, data calculation by YLG

Thai customs data shows that the country relies heavily on gold imports to meet its demand, with spending on overseas purchases of gold reaching 397.486 billion baht (US$11.62 billion) in 2022, a significant jump of 49% compared to 267.205 billion baht in 2021. In terms of volume, the country imported 201.51 tonnes of gold in 2022, marking a gain of 33.04% compared to 151.46 tonnes in 2021.

Source: Thai Customs Department, data calculation by YLG

On the other hand, Thailand’s gold exports showed significant growth, with the export value reaching 238.326 billion baht in 2022, a marked increase compared to the previous year’s export value of about 122.937 billion baht. In volume terms, the country exported 123.005 tonnes of gold in 2022 – a gain of 75% compared to 70.29 tonnes of gold in 2021.

Source: Thai Customs Department, data calculation by YLG

The overall demand for gold in Thailand has been supported by the reopening of the economy, recovery in tourism, and the drop in local gold prices in September and October, which encouraged gold buyers to accumulate gold in anticipation of year-end festivities.

Additionally, the pandemic has led to a “New Normal” in Thailand’s gold market, with physical gold buyers facing challenges in buying gold offline due to structured retail hours and difficulties in selling it back. As a result, gold saving schemes have gained traction, offering a convenient and affordable way to invest in gold online, with the flexibility to buy and sell readily.

The primary agenda of gold saving scheme is to make purchasing gold simpler and more affordable. It acts as a recurring bank deposit, except in this case, the endgame is purchasing gold. It doesn’t require a lot of money, and investors can make transactions easily and conveniently through online channels via website and mobile apps. By sending orders using real-time prices 24 hours a day, they can start investing with a minimum of 100 baht per transaction and continue to accumulate gold. Upon the accumulation of gold, investors can choose to take profit or receive physical gold by delivery to their doorsteps. As such, these schemes meet the needs of the younger generation to access gold investments more easily.

LOOKING AHEAD IN 2023, THAILAND’S GOLD CONSUMER DEMAND IS LIKELY TO CAPITALISE ON A RESILIENT 2023, DRIVEN PRIMARILY WITH POSITIVE EFFECTS OF THE REOPENING OF CHINA TOWARDS THAILAND’S ECONOMY, ALTHOUGH A HIGHER LOCAL PRICE MIGHT LIMIT BUYING HABITS TO A CERTAIN EXTENT.

Looking ahead in 2023, Thailand’s gold consumer demand is likely to capitalise on a resilient 2023, driven primarily with positive effects of the reopening of China towards Thailand’s economy, although a higher local price might limit buying habits to a certain extent. However, every Thai household’s income and wealth is being eroded with food and energy prices hitting record highs. Thai people are aware that the best way to counter inflation and bolster wealth protection is to save and invest for the future. Undoubtedly, gold will always be their first choice.

PAWWAN NAWWATTANASUB 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.