Thailand experiences gold rush, share plunge


BANGKOK, Aug 8 – Mounting concerns over the rising risk of global recession and heavy public debt loads in the U.S. and Europe prompted many Thais to rush to buy gold bars and ornaments as a safe haven amid market jitters across the region.

Gold Traders Association President Jitti Tangsithpakdi said gold bars and ornaments ‘sold like hot cakes’. Some shops ran out of gold and had to distribute coupons for customers to collect the purchased items next week.

Mr Jitti commented that the gold fever was unusual as many Thais expected the prices will rise further locally and internationally. He urged local investors to be more cautious as the gold price has risen as much as 250 dollars per ounce since July with no sign of dropping.

The Gold Traders’ Association on Monday set the selling price at Bt24,500 per baht weight for gold ornaments and Bt24,100 per baht weight for gold bars. The prices were adjusted ten times in a single day.

Meanwhile, the Stock Exchange of Thailand’s composite index on Monday was down 15.19 points or 1.39 per cent to close at 1,078.19 points on Monday afternoon in trade worth Bt41 billion.

The SET index clawed its way back from a decline in morning trade after banking and energy shares regained some of the ground lost in early trade in the wake of relief following the European Central Bank’s move to buy bonds of Euro zone strugglers Italy and Spain. The index was unable, however, to remain in positive territory. Energy shares dropped 1.26 per cent followed by banking shares which fell 0.91 per cent.

The impact of the S&P rating cut was felt in Asia and Europe.

Japan’s Nikkei stock average slid 2.2 per cent at Monday closing, Hong Kong lost 2.11 percent,  Seoul sank 3.82 percent and Shanghai lost 3.55 percent. The FTS Eurofirst 300 index of top European shares fell 1.8 per cent in early trading after a bounce following the European Central Bank’s move to buy Spanish and Italian bonds.