Thailand’s gold shops are running out of cash because so many people want to sell ornaments, jewelry and bars amid an economic slowdown.
“I’m asking people to sell gradually, not in large amounts, as shops may face a cash crunch,” Prime Minister Prayuth Chan-Ocha said in a briefing Wednesday in Bangkok.
The yellow metal remains a popular way for Thais to save money, but a surge in global gold prices to near the highest level in seven years has tempted many to sell. People are trying to raise money after the corona virus-induced slowdown led to major job losses and wage cuts.
Prayuth said officials are trying to work out a plan for gold shops to cope with long lines of sellers. Thailand is under a partial lockdown through April to curb the disease known as Covid-19, but some businesses deemed essential remain open.
Mad dash to cash as gold spikes
Jitti Tangsithpakdi, chairman of the Gold Traders Association and owner of Chin Hua Heng Goldsmith, said sales volume at his company amounted to 200 million baht on Tuesday, which could mean billions for the sum of all goldsmiths on Yaowarat Road.
“Don’t unload gold all at one time as huge sums can mean hundreds of billions of baht, and no goldsmith can tolerate that selling pressure,” he said.
The gold price spike to a seven-year high has prompted a wild selling spree as some rush to sell the precious metal to raise cash as the pandemic spreads, impacting businesses and the economy as gold hoarders cash in.
People standing patiently in queues stretching hundreds of metres to reach goldsmiths’ counters to sell the metal for cash has become a common sight on Bangkok’s Yaowarat Road, home to major goldsmiths.
The one-sided selling in the domestic market and difficulties to export gold after most flights have ceased and lockdown measures are adopted in some major gold markets have forced some goldsmiths to halt their operations for fears of cash flow shortage.
Most of the gold sold is bullion, reflecting that sales have been for profit as gold bar is normally used for investment, said Mr Jitti.
In Thailand, the gold price has risen by 6,000 baht since the beginning of this year. Furthermore the baht’s weakness against the US dollar gave local sellers a windfall.