The public continues to sell off gold holdings, but the sales volume has halved in two weeks, with the long queues on Yaowarat Road disappearing after gold prices fell to a one-week low.
The lower sales volume is due to a fall in gold prices and the fact that investors have already offloaded their holdings of the precious metal, said Kritcharat Hirunyasiri, MTS Gold's chairman.
A correction during a potential price spike is normal since gold prices continue to break projected resistance levels, Mr Kritcharat said.
Gold prices spiking to a seven-year high prompted a wild selling spree as some gold hoarders rushed to sell the precious metal to raise cash as the pandemic spreads, impacting businesses and the economy.
In Thailand, the gold price has risen by 6,000 baht since the beginning of this year, and the baht's weakness against the US dollar gave local sellers a windfall.
Gold is often sought as a safe store of value in times of economic turmoil and benefits from central bank easing that pushes down bond yields and raises fears of inflation eroding the value of other assets, making the metal more attractive.
Last week, people stood patiently in queues stretching hundreds of metres to reach goldsmiths' counters to sell the metal for cash on Bangkok's Yaowarat Road, home to major goldsmiths.
Two branches of Chin Hua Heng gold shop located in Yaowarat contemplated closing once a week or shuttering operations on Sundays following the mad dash to cash in on gold spike.
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 fear of cash flow shortages.
On Tuesday, the gold price quoted in baht saw a slight increase of 50 baht to 25,850 baht per one baht-weighted gold.
The trailing queues outside goldsmith shops along the streets of Yaowarat are no longer present after these shops have re-opened to serve selling demand.
Gold prices have dropped for two consecutive days after hitting a seven-year high last week, said Tanarat Pasawongse, chief executive at Hua Seng Heng Group of Companies.
Gold price is expected to range US$1,670-1,700 this week, with the support level projected at $1,670-1,650, said Mr Tanarat.
Jitti Tangsithpakdi, chairman of Gold Traders Association said, only a handful of people come to buy gold, while many gold ornament shops have closed during the pandemic.
Local gold traders have also been experiencing difficulties as many face logistics problems when exporting bullion to Europe, Mr Jitti said.
According to Commerce Ministry data, gold outbound shipments for the first two months this year of 51,994 kilogrammes more than tripled the import volume of 16,304kg. Gold export value amounting to 78.8 billion baht during January-February also far exceeded 20.5 billion baht in import value.
