The Bank of Thailand has announced plans to introduce stricter regulations on online gold trading, aiming to mitigate the impact of volatile gold prices on the Thai baht. The new measures, set to take effect in March, will cap daily online gold transactions in Thai baht at 50 million baht ($1.6 million) per user. Any transaction exceeding this limit will require prior approval from authorities.
Assistant Governor Pimpan Charoenkwan stated on Friday that the regulations will enhance transparency on online platforms without significantly affecting gold trading, which has grown in popularity. Users who already hold more than 50 million baht worth of gold in their accounts before the end of January will be exempt from the cap, allowing them to sell their holdings back to platform operators without additional permission. The rules do not apply to gold trades in foreign currencies or physical gold transactions.
Gold traders will also be required to maintain transaction records and regularly report their activities to the central bank. The international price of gold has more than doubled this year, surpassing $5,000 per ounce for the first time earlier this week. In Thailand, gold prices surged above 80,000 baht ($2,545) per baht-weight on Thursday before dropping sharply on Friday, highlighting the volatility that has raised concerns.
Governor Vithai Ratanakorn noted in a speech on Wednesday that Thailand has never properly regulated gold trading despite its significance as an investment method. He explained that gold shops often serve as de facto financial institutions, and online gold trading can significantly affect the baht. When prices surge, investors sell gold in large volumes, prompting shops to sell the gold in U.S. dollars and convert the proceeds back into baht, causing the currency to appreciate. The new regulations are also intended to help combat money laundering.
