Gold bar price spread widened to B300

Gold bar price spread widened to B300

Gold bars on display at a Hua Seng Heng shop. The new spread trading price for local gold bars is quoted at 300 baht per ounce with immediate effect.
Gold bars on display at a Hua Seng Heng shop. The new spread trading price for local gold bars is quoted at 300 baht per ounce with immediate effect.

The Gold Traders Association has widened the price spread for trading local gold bars to 300 baht, as the global gold trade faces transport problems because of the Covid-19 pandemic.

Jitti Tangsitpakdee, chairman of the association, whose members include gold importers, exporters, wholesalers and retailers, announced on Wednesday morning that the spread of bid and sales prices for gold bars would be fixed at 300 baht, with immediate effect.

Earlier, the spread for domestic bullion trade was 100 baht per baht-weight.

"The Covid-19 outbreak has caused a huge impact on the gold business," Mr Jitti said. "The market price is fluctuating wildly because commercial airline flights are limited and insurance premiums have increased."

Normally the transport, insurance and other expenses, also known as premiums, of imported and exported gold are quoted at 30-50 cents (10-20 baht).

But with the Covid-19 crisis, premiums have jumped by over 100% to $US25 (around 800 baht), making the former spread of 100 baht insufficient to cover the cost and volatility in price movement.

Thailand does not produce gold bars, but rather imports them from Hong Kong and Singapore to serve domestic demand for the jewellery business, trading and investment incentives.

Local companies also export their gold holdings when there is an excess in supply and falling demand, or to beef up liquidity when customers want to exchange gold bars for cash.

Although the bullion trade, which accounts for about 90% of the total gold trade in Thailand, has experienced the impact, the spread for gold ornament prices quoted at local gold shops is still unchanged, Mr Jitti said.

Tanarat Pasawongse, chairman of Hua Seng Heng Group of Companies, said the effect of the revised spread on online gold investors will depend on their price settlement and gold deli­very methods.

If investors make payment without physical gold delivery, the quoted bidding and offering prices are still narrow, Mr Tanarat said.

But if investors want to receive physical gold bars when making settlements, there will be an impact, he said.

For gold investors and those using gold for savings, the Covid-19 pandemic will not have a significant impact, Mr Tanarat said.

For gold ornaments, Hua Seng Heng is helping customers by offering a narrower goldsmith's charge than usual.

The association will discuss the practices of gold shops if any issues arise related to public health, Mr Tanarat said.

"If gold shops were to close, this would be announced by the association," he said.


Do you like the content of this article?
COMMENT (11)

UN chief warns against 'new Cold War'

UNITED NATIONS (UNITED STATES) - UN Secretary-General Antonio Guterres on Tuesday urged the world to prevent a Cold War between the United States and China and halt conflicts so it can focus on the Covid-19 pandemic.

20:45

'People's bill'

iLaw submits to Parliament president what it calls the people's constitution amendment bill, backed by more than 100,000 voters who signed up to support it. But it is unlikely to be deliberated anytime soon.

18:31

Sex workers petition to decriminalise prostitution

Sex workers in Thailand have launched a petition calling for prostitution to be decriminalised and urging authorities to remove all penalties for selling sex.

18:08