Thailand : Gold Imports, Exports, Reserves, Trading

Gold imports into Thailand from 2005 onwards.

Gold and associated products like jewelry and silver, consistently are listed among the 10 most traded categories of goods from and to Thailand. For gold, Switzerland appears to be a favored trading partner for both imports and exports. It is noted that trade volume varies from year to year, and seems to be guided by economic conditions as explained later.

Unwrought Gold exports from Thailand from 2005 onwards.

The chart above shows unwrought gold exports. It is possible to notice that imports and exports move in opposite directions. If imports are high, likely exports will be kind of low, and vice versa. This is more obvious on the chart below, where we measured the trade balance for imports and exports of gold. Overall gold imports from 2005 till 2011 had a value of 127,772 billion U.S. Dollars. Over the same period gold exports had a value of 81,438 billion U.S. Dollars. So more than 46 billions U.S. Dollar Value of Gold moved to Thailand, we reckon most of it into private hands. It is important to note that we do not provide data on the amount of gold imported or exported, which limits our conclusions. Obviously, gold was priced much lower around 2005 than it is now. The Ministry of Commerce of Thailand does not publish these data online.

Trade balance of Gold Imports into and Gold Exports from Thailand.

The chart above shows that overall the value of imported gold in most years exceeds the value of exported gold.

There are at least three period when gold exports where higher than gold imports :

• During and after the debt crisis of 2008-2009 that originated in the U.S.A. and had consequences around the world.
• At the time of the loss of value in the Chinese stock market (2005), which maybe did not cause a major world crisis, but surely had effects in Thailand.
• During the first year of the Covid-19 pandemic (2020). This export surge seems to have had the most profound effect

What lies behind the surge of exports of Thai gold during global or local economic crises ? See below.

Why do exports increase during bad times? When times are hard, people tend to run out of money to pay for monthly rents, food, education for their children, etc. We reckon a lot of Thai people have some small amounts of gold stashed away, as use as a medium for savings, in favor of just cash money. They sell their gold in one of the many gold shops around town in Bangkok, and in other cities in Thailand. Interestingly, the Thai gold shops do not hoard the gold in some large vaults, but sell off (part of) their stock. They may need cash money to have cash flow to pay their customers for the gold delivered. They simply may not want to take the risks of any major drop in prices, so they the sell it, most of it going abroad, in many cases Switzerland.

Personally, we think it is a pity that such a trading scheme is used. Better for Thailand in the long run, that the gold stays in the country, whether in some private operated vaults, and in government (Bank of Thailand) hands.

The gold reserves of Thailand are no secret. Foreign currency of gold reserves can be found at the website of the Bank of Thailand. However, it is a deep link, so we advise to search for 'gold reserves Bank of Thailand' , and use the link that mentions 'Bank of Thailand : Statistical Data', on the bot.or.th website. From the published data in the graph above, you can see a minor surge in the value of gold reserves in 2011-2012, we reckon at the time of the consequences of the U.S.A. initial debt crisis. Then later on, and just recently, a major search during the march-may period of 2020. This, of course, at the time of the Covid-19 pandemic. Not sure, the Bank of Thailand is taking precautions against some imminent economic of financial danger here. Time will tell. The purchases (from where ?) took place in April and May 2021, and amounted to about 90 tons of gold, equivalent at the time to 2.9 million ounces of gold ! At that time of the year, it was the largest purchase by a country since a purchase of 100 tons by Poland at the beginning of 2019. The Bank of Thailand posted the data on their website, and the IMF also knew about it, but little (or nothing) was mentioned about it in news media.

At the end of 2021, total net international reserves of Thailand, stood at 279,156.76 million U.S. Dollar. Gold reserves made up 5.1 % of this amount. Actually, also for private persons, it may be a good idea to have 5 % of their savings in gold (preferentially physical), though 10 % may be even better.

For all about gold buying, selling, trading in Thailand.