Domestic demand surges amid rising baht
Thailand’s passion for gold continues unabated. For the fifth consecutive year, investors are snapping up the precious metal, encouraged by a rally in the Thai baht, which makes bullion purchases more affordable. The trend, however, complicates the central bank’s efforts to manage the currency.
Estimates from the Thai Futures Exchange suggest that demand for physical gold (excluding central bank purchases) will rise about 10% in 2025 to 53.7 tonnes. During the first half of the year alone, consumption jumped 21% to 20.7 tonnes, according to the World Gold Council.
“People in Thailand love buying gold,” said Nuttapong Hirunyasiri, managing director of MTS Gold Group. “Even as prices climb, both buyers and sellers remain highly active.”
Tradition meets investment
Gold holds deep cultural significance in Thailand. It is used as offerings in Buddhist temples and serves as a traditional wealth safeguard, often passed down through generations. Families view it as a secure form of saving and an inheritance for children and grandchildren.
Thailand is also the only country globally to see four consecutive years of gold demand growth during the pandemic, according to YLG Bullion International, highlighting the stability of this investment among the population.
The baht factor
A strong baht has fueled the surge in gold purchases. In 2025, the currency has appreciated about 7%, reaching its highest level since 2021.
“This is one reason many investors are buying gold now,” explained Jitti Tangsithpakdi, president of the Gold Traders Association.
The Bank of Thailand notes that gold sales contribute to baht strength: When Thais sell gold, proceeds are often converted into baht, boosting domestic demand for the currency. This close link between gold and the baht is unusual in Asia.
Economic concerns
While investors cheer, strong currency levels worry exporters and the tourism sector, as higher baht values reduce competitiveness and make Thailand more expensive for foreign visitors. Authorities and business groups are discussing ways to stabilize the currency, with the central bank coordinating with the finance ministry.
Mixed views on causes
Not all experts agree that gold is the main driver of the baht’s strength. Some cite a weaker US dollar and confidence in Thailand’s new government as more influential factors.
“Gold can contribute to short-term currency movements, but it’s not the primary cause,” said Tipa Nawawattanasub, CEO of YLG Bullion Futures.
Geopolitics and financial markets
Weak domestic stock markets and low government bond yields also push Thais toward gold. Geopolitical tensions and the policies of US President Donald Trump have further heightened uncertainty, boosting bullion demand.
“The sky’s the limit for gold prices,” said MTS CEO Nuttapong.
Outlook
With continued confidence in gold, underperforming alternatives, and global uncertainty, demand for the precious metal is expected to remain strong in the coming months. The central bank will continue to contend with the challenges posed by Thailand’s unique connection between gold trading and currency movements.