The Thai government will impose stricter control on domestic gold transactions after discovering unscrupulous trading by some gold traders, Deputy Commerce Minister Yanyong Puangrach said today.
He discussed the new measure with representatives of the Bank of Thailand (BoT) and the Gold Traders Association.
Some traders were found to trade gold at a daily value of Bt100 million when their registered capital was only Bt1 million, he said, adding that the tougher controls were for consumer safety and would not affect the country’s overall economy.
The Commerce Ministry earlier instructed gold traders nationwide to register with the Internal Trade Department to enable the authorities to closely monitor their trading activity, especially online speculative trading and gold purchases by letters of credit.
Thailand’s total gold trading is over Bt1 trillion each year – much higher than the import value at only Bt30 billion, said Mr Yanyong.
He said the Business Development Department reported that 1,866 traders were granted business registrations and the registered capital of some traders was only Bt1 million while their trading value amounted to Bt100 million per day.
Some foreigners also unscrupulously bought gold through Thai nominees, he said.
He added that registered traders would be required to report their daily gold holdings to prevent possible fraud between traders and buyers.
Trade in gold bullion and ornaments continues to rise and the risk of price volatility was high given the dependence of domestic trading on foreign markets, Mr Yanyong explained.