oaring gold prices seen hitting Thai demand

BANGKOK: High gold prices are expected to hit demand in Thailand, a major jewellery exporter where people already struggle with high oil prices and rising costs of living, a leading industry executive said on Tuesday.

“Thailand’s gold imports this year are expected to be cut by 20-30 percent from last year’s due to high prices,” Jitti Tangsithpakdi, head of the Thai Gold Traders’ Association told Reuters.

Thailand imported around 120 tonnes of gold in 2005, 40 percent of it for domestic consumption and the rest for either investment or re-export as jewellery. Thais usually buy gold for jewellery, Jitti said.

But demand for gold bars remains strong as Thai investors, who have dominated the physical market in Southeast Asia in recent months, were expected to continue buying bullion for investment, he said. Jitti, who has been in the business for around 50 years, told Reuters investing in gold was probably more profitable than stocks or property.

“Buying gold could possibly be the best investment choice at the moment given its better returns of more than 20 percent so far this year,” he said. Thailand is also expected to see its gold jewellery exports, mainly to Hong Kong, Japan and the United States, fall this year as demand falls, Jitti said.

A large number of jewellery makers had already lost their jobs in an industry that employs up to 300,000 people, he added. Reuters