Despite high prices, Thailand leads Asia in demand for gold
Demand for gold in Thailand is on the rise, defying global trends of record-high prices, according to the World Gold Council's latest report, released on Tuesday.
The report noted that Thailand's gold market showed particular resilience in the second quarter, with bar and coin investment surging 22% year-on-year to 7 tonnes, as investors sought refuge in gold amidst ongoing weakness in the baht. Jewellery demand also rose, increasing 12% year-on-year to 2 tonnes, defying the global trend of declining jewellery sales due to high prices.
“Thailand bucked current trends in the second quarter, despite the record gold price environment. Consumers reacted to the mid-quarter price correction, seizing the opportunity to buy before prices resumed their upward trend,” the Council’s Shaokai Fan noted.
Meanwhile, consumer gold demand across Southeast Asia grew by 20% YoY to nine tonnes, with Thailand leading the pack. This contributed to a robust 4% increase in overall global gold demand to 1,258 tonnes from April to June.
Global gold demand rose by 4% to 1,258 tonnes, bolstered by robust over-the-counter transactions, which saw a significant 53% increase to 329 tonnes.
The quarter witnessed record-high gold prices, with the average reaching US$2,338 per ounce, an 18% increase, and peaking at $2,427/ounce.
However, global jewellery demand fell by 19%. Gold ETFs experienced a minor outflow of 7 tonnes, while demand for gold in technology increased by 11%, primarily due to the AI boom in the electronics sector.
Central banks continued to augment their gold reserves, adding 183 tonnes globally. Although this represents a slowdown from the previous quarter, it still reflects a 6% YoY increase.
“The gold price has been a headline-grabber, supported by central bank and OTC demand. However, jewellery demand has suffered due to high prices. A US Federal Reserve rate cut and India’s import duty reduction could reinvigorate gold demand,” said Louise Street, the Council’s senior markets analyst.
While challenges remain, the World Gold Council believes that the evolving global market landscape will support and potentially elevate gold demand in the coming months.
