Thailand Considers Limits on Speculative Gold Trading to Stabilize Baht

Thailand is considering introducing limits on speculative gold trading to address growing concerns over the impact of the precious metal's price surge on the national currency, the baht. Thailand may impose a daily cap of 100-200 million baht ($3.2-$6.4 million) on online gold trading, according to Bank of Thailand Governor Vitai Ratanakorn. The measure is part of a broader effort to counter the currency's multi-year high, which has been fueled by gold transactions. The finance ministry is set to unveil draft rules later this month, which include additional restrictions on foreign currency transactions with money changers. These measures are being discussed at a high-level meeting chaired by Prime Minister Anutin Charnvirakul.

Why Is the Move Happening?

The government has been monitoring the increasing influence of gold trading on the baht, which has gained 8% last year. The currency's strength is undermining export competitiveness and affecting tourism revenue. Daily gold trading volumes in Thailand have exceeded those on the local stock exchange, with gold-related deals accounting for up to 60% of total dollar trading during peak periods. Authorities have previously threatened a punitive tax and increased scrutiny of bullion trading. These steps aim to prevent further pressure on the currency and to address the economic concerns arising from excessive gold speculation.

How Are the Markets Responding?

The central bank has already intervened heavily in the currency market in the second half of 2025 to manage volatility. The proposed new measures include tighter reporting requirements for physical gold trading.

Leading bullion dealers, who control about 90% of the market, are proposing to upgrade their platforms to facilitate dollar-based transactions within three to six months. This shift aims to reduce the impact of gold trading on the baht. Gold trading in Thailand reached approximately 10 trillion baht ($318 billion) in 2024, doubling from the previous year. The country remained a net gold importer, with 180 tons brought in while exporting 110 tons.

What Are Analysts Watching Next?

Market participants are closely monitoring the potential economic consequences of these new measures. The Bank of Thailand is expected to continue using its remaining policy tools to manage economic shocks. The proposed measures aim to reduce the amount of gold traded in baht while encouraging dollar-based transactions. This could help stabilize the currency without completely curbing Thailand's appeal as a gold trading hub. The government is also exploring other initiatives to boost tourism and infrastructure development, including the potential construction of a Disneyland in the Eastern Economic Corridor. This move is part of a broader strategy to attract visitors and support regional economic growth.

The proposed changes are part of a multi-faceted approach to address currency volatility and to support broader economic stability. As the global economic landscape continues to evolve, the impact of these measures on Thailand's economy and its international trade dynamics will be closely observed.