BoT denies buying gold in bulk

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BANGKOK, 4 August 2011  – The Bank of Thailand (BoT) has dismissed a rumour that it bought a large amount of gold in the market, leading to a sharp increase in the gold price yesterday. 

BoT Governor Prasarn Trairatvorakul downplayed the news report that the BoT purchased about 17-18 tons of gold, pushing the domestic gold price up by 550 baht per one-baht weight in a single day on Wednesday.

Mr Prasarn clarified that the BoT had gradually purchased a total of 30 tons of gold wheh price was low. The addition has raised the amount of gold in Thailand’s international reserves from 100 tons to 130 tons.

The governor explained that the gold purchase was made in order to maintain the gold ratio in the international reserves at 3% and diversify the types of assets for greater security.

Mr Prasarn noted that so far the amount of reserves has been increasing but some types of assets Thailand is holding are depreciating, especially bonds and currencies of major countries such as US dollars, euro and pound sterling despite their liquidity.

As for gold price on Thursday, gold bullion is bought at 23,300 baht and sold at 23,400 baht per one-baht weight respectively. Gold ornament is bought at 22,967.40 baht and sold at 23,800 baht per one-baht weight respectively.