BANGKOK (REUTERS) - Cash-strapped Thais rushed to sell gold in Bangkok's Chinatown, on Thursday (April 16), cashing in on a surge in the price of the precious metal as the new coronavirus outbreak pulls the economy into a recession, with millions losing jobs.
Many Thais keep some savings in gold and at a time of hardship, are taking advantage of a recent rise in the benchmark global price to US$1,722 an ounce, a seven-year high. In Thai baht, prices hit an all-time high this week.
"Because of the Covid-19 situation, I couldn't make a living and I still have to pay for my staff. That's why I need to sell my gold," said online clothes seller Tippawan Saen-Usa, 28.
Wearing masks and trying to keep at least a few feet apart, people started queuing hours before shops opened at 8am. The lines stretched for several blocks.
Business owner Wutthichai Suwannaro said he was cashing in 120,000 baht (S$5,250). "The market where I work is closed now that's why I need to sell gold to cover my family expenses," he said.
Spot gold prices in Thai baht have climbed by over 24 per cent so far in 2020, compared with a 13 per cent rise in US dollars.
"In over 60 years in business, this is the first time that I've seen people selling a lot of gold," said Mr Jitti Tangsithpakdi, president of the Gold Traders Association.
"I suggest don't sell your gold at once as Covid-19 will not be over soon and gold prices may still make new highs," he said.
Thailand has reported 2,672 cases of infection and 46 deaths. It has imposed a nationwide night curfew, having closed malls and bars and banned passenger flights as well as discouraged activity to limit the spread.
The central bank expects the economy to contract 5.3 per cent this year, the worst contraction since 1998 during the Asian financial crisis.
Thai households have invested a lot in gold and will sell the gold whenever gold prices go up or during economic hardship.
"Gold selling will continue for a while as prices are still high," said Mr Tanarat Pasawongse, chief executive officer of Hua Seng Heng Group, Thailand's largest gold trader.
"Most people are selling gold jewellery, which reflects the bad economy, so people want to have cash," he said.