Jitti Tangsithpakdi, President of the Gold Traders Association (GTA), said it remains unclear whether the Bank of Thailand and the Finance Ministry would impose a tax on physical gold or online gold trade.
"We don’t agree with any kind of tax as it could send a signal that the Thai gold industry is stepping backward, jeopardising Thailand’s role as a gold trading hub," Mr Jitti told the Bangkok Post.
"Countries such as Malaysia are abolishing taxes on gold to compete with Thailand as a regional hub. We should not do anything that undermines efforts to position Thailand as a regional hub for gold and jewellery in Southeast Asia."
The central bank and Finance Ministry held a meeting on Monday (Sept 15) with more than 10 gold traders to discuss ways to ease pressure on the baht caused by gold transactions.
Earnings from gold exports helped fuel the baht’s rally to a four-year high last week, with its appreciation of more than 7% against the dollar this year prompting calls for stronger central bank intervention to protect exports and tourism.
Authorities also urged members of the GTA to monitor bullion transactions in baht to curb currency risks and illegal activities.
Data indicated Thailand’s gold exports jumped 69% year-on-year to B254 billion (US$8bn) in the first seven months of 2025, with an unusual jump in shipments to Cambodia sparking demands for a probe.
Gold traders have insisted the strong baht has little to do with gold trading.
"Gold imports have also risen this year, and the increase exceeds exports. This means we use more baht to buy more dollars than sell dollars for baht," said Mr Jitti.
"These transactions should weaken the baht, not cause it to appreciate."
Siriluck Pakotiprapha, vice-president of research at Hua Seng Heng Futures Co, shared a similar view, adding any measures to intervene in the free market should be avoided.
"Efforts to slow the baht’s rise should not distort Thailand’s gold market mechanism," she said.
"Such measures could lessen Thailand’s competitiveness as a gold trading hub."
DUBIOUS TAX
A source from the Finance Ministry who requested anonymity said the ministry is considering a tax on physical gold trading to slow the baht rally, though the source conceded such a levy may not weaken the currency.
Gold trading represents a small portion of the country’s dollar-denominated income. Revenue from exports far exceeds income from gold exports, so raising taxes on gold trade may not be effective in slowing the baht’s appreciation, said the source.
The rising demand for gold in Cambodia stems from uncertainty about the Cambodian currency and economy, prompting investors there to turn to a more stable asset, noted the source.
The proposal to tax gold sales to reduce pressure on the baht is based on the idea that when gold is sold abroad, exporters receive US dollars.
When these dollars are exchanged into baht, demand for the baht rises, which could cause the currency to appreciate. Therefore, a tax on gold sales was suggested when the income is earned in dollars and then converted into baht.
However, the opposition argues that gold sales only account for a small portion of dollar-denominated income.
The main pressure on the baht comes from dollar depreciation, said the source.
PRICE TREND
Mr Jitti and Ms Siriluck said both the global and domestic gold prices are on course to rise further if the Federal Reserve cuts interest rates by more than 25 basis points at its meeting this week, or sends a clear signal about its concerns for the US economy, particularly the labour market.
Bullion rose to a record high of $3,696 an ounce on Tuesday (Sept 16), helped by a softer dollar ahead of the Fed meeting later in the day.
Domestic prices, according to GTA, soared B500, after surpassing B55,000 per baht-weight on Monday.
Ms Sirluck anticipated gold prices could top $3,700 an ounce in the near term, depending on the Fed’s dot plot and comments from chairman Jerome Powell after the two-day meeting. Domestic prices could increase to a range of B56,000-56,600 per baht-weight.
Mr Jitti was more bullish, saying global prices are on course to reach $3,800 an ounce by year-end as the market is convinced the Fed will cut the rate at each of its three remaining meetings this year.
Non-yielding bullion tends to do well in a low interest rate environment, he said.