BANGKOK, THAILAND – A historic plunge in gold prices over two days sent shops, pawn counters and currency markets across Thailand into turmoil as investors and households scrambled to respond.
Two-day collapse after record highs
After record levels on Thursday, the price of gold reversed sharply on Friday, dropping 12 percent within hours and extending its losses into Saturday. Electronic boards in gold shops were reportedly changed 75 times on Friday, reflecting a market gripped by simultaneous panic selling and opportunistic buying.
Bangkok’s Chinatown under strain
In the traditional gold district of Bangkok’s Chinatown around Athrdi Avenue, traders reported shops that remained full throughout the day as the narrow streets turned into a trading hotspot. Pawnshops in the area also saw long queues as many households tried to pawn gold or lock in recent gains to secure short-term liquidity.
Gold as a financial lifeline
Gold functioned not only as jewellery and gifts but also as a key savings tool for many low-income families, deployed deliberately in times of financial stress. Because sudden price swings had immediate effects on daily life, pawnshops again became a critical outlet on Friday to cover running expenses and seasonal obligations.
Baht weakens as dollar advances
At the same time, the baht came under visible pressure on Friday as the US dollar climbed from 30.9 to 31.56 baht, weakening a currency that had previously been supported by strong gold prices. The Bank of Thailand had earlier pointed to an indirect link between high gold prices and a firmer baht, and the latest decline appeared to confirm that view, even as exporters welcomed the weaker currency in the short term.
Local prices slide, sentiment sours
On Saturday, local gold prices fell further, dropping by 1,200 baht per baht weight (15.2 grams), adding visibly to two days of losses and keeping retail sentiment tense. According to the Gold Traders Association, Saturday morning buying prices for gold jewellery stood at 72,616.40 baht per baht weight and 74,100 baht for bars, while jewellery was sold at 75,000 baht and bars at 74,200 baht per baht weight.
Weekly gains overshadowed by volatility
Despite the sharp correction, prices remained 1,100 baht higher on a weekly basis than the previous Friday, but momentum had clearly turned and confidence among many market participants had fallen. From Thursday’s close at 81,500 baht per baht weight to the low, the price fell by 6,100 baht, wiping out much of the gains from the recent record phase within hours.
Global sell-off and policy uncertainty
Internationally, gold also recorded its steepest one-day loss since 1983 on Friday, driven by profit-taking, tighter liquidity in commodities markets and mounting price pressure. The spot price fell below 4,900 US dollars per ounce by Saturday, after reaching 5,602 dollars two days earlier, with commentators citing changes in the US monetary policy team and broader macroeconomic flows without identifying a single trigger.
Analyst: market was ‘overdue for a correction’
“The market was overdue for a correction,”
said Suki Cooper, analyst at Standard Chartered Bank, who pointed to several interacting factors now hitting at the same time. Despite the slump, gold was still heading for a 13 percent monthly gain and a sixth consecutive monthly increase, but in the short term extreme swings and falling precious metal prices dominated sentiment.
Silver hit harder, trillions wiped out
Other metals were struck even more severely, with silver at times losing up to 34 percent of its value, marking the largest percentage daily decline in its trading history. The drop even surpassed the famed collapse linked to the Hunt brothers in the 1980s, and nearly 10 trillion US dollars in market value was erased globally within 24 hours, according to market data.
Provincial pawnshops under pressure
In the provincial market of Uthai Thani, a similar picture emerged as pawnshops remained busy throughout Friday with customers constantly pawning or redeeming gold. Reporters observed the municipal pawnshop on 30 January, where long queues formed and staff handled a steady flow of clients without interruption.
Voices from Uthai Thani pawn counter
“Customer traffic has surged after the recent price movements,”
said Pattaya Thiansang, head of the municipal pawnshop, adding that the facility had already been full throughout 29 January. Many people pawned gold to secure daily cash flow or cover ongoing expenses, while the pawnshop raised loan values in line with market prices to meet strong demand.
Speculation and debt reduction
A second group of customers redeemed previously pawned gold in order to resell it to gold dealers, aiming to exploit price differences, realise gains or reduce debts. This created strong flows in both directions, with redemptions and new pawns keeping activity at the pawnshop high and continuous.
Uncertain outlook, cautious optimism
Authorities and market observers closely monitored price movements, noting a clear short-term downward trend while the future direction remained uncertain amid ongoing volatility. Business owners and exporters associated the end of the latest gold run with hopes of market normalisation and saw the stronger US dollar and the correction in gold as a possible signal of a more optimistic global outlook.