The World Gold Council has suggested that Thailand has the capacity to be a major hub for gold thanks to the surge in Thailand’s investment demand for gold.
The World Gold Council has recently reported that demand in Thailand for gold jewelry rose by 57% year-on-year in the third quarter of 2013; the country also saw a 126% year-on-year rise in gold bar investment. The Council attributed the rise in demand for gold to concerns that the Thai baht might be devalued.
Thailand’s higher demand for gold has caused a ripple effect throughout Asia since the country is an important route to channel gold into other markets, especially India; given that Thai gold imports substantially benefit from the Thai-Indian bilateral free trade agreement, which lowers import taxes to 1% on Thai jewelry, compared to 10% on other countries.
Although Thailand’s consumer demand for gold paled in comparison to those of India and China, its year-on-year growth rate is higher than both countries’.