Thai gold traders plan dollar-based trading to curb baht rally

A group of 14 bullion dealers will upgrade online systems within three to six months to allow dollar-denominated gold trading, and the Bank of Thailand has agreed to work with commercial banks to ease currency conversions as part of the plan.

Thailand's largest gold traders are preparing to offer dollar-denominated transactions and will upgrade online trading systems to enable US dollar trading. The group of 14 bullion dealers says the changes will roll out within three to six months. The move comes as authorities weigh measures to curb speculative trading that has helped push the baht to multi-year highs. Traders and officials say the shift could reduce gold's direct influence on the currency and address calls for tax action. Key details: - Fourteen bullion dealers plan to upgrade their online platforms within three to six months to support dollar-based gold transactions, according to Kritcharat Hirunyasiri, chairman of MTS Gold Group. - The Bank of Thailand has agreed to coordinate with commercial banks to make currency conversions easier to support dollar trading, as reported by market participants. - The initiative is framed as a response to concerns that gold-related deals have contributed to the baht rally and to proposals for a special tax on gold transactions aimed at curbing speculative trades. - The baht gained about 8% last year, making it one of Asia's stronger performers, and at peak periods gold deals accounted for an estimated 50%–60% of Thailand's total dollar trading, the central bank said. - Total bullion trading was estimated at roughly 10 trillion baht last year, and Thailand remained a net gold importer, bringing in about 180 tons and exporting about 110 tons, per the Thai Gold Traders Association. Summary: Traders say shifting to dollar-based gold trading could reduce the metal's influence on the baht and lessen pressure that has prompted talk of new taxes. Major dealers expect to implement system upgrades within three months to six months, and officials have indicated that if adoption remains limited, tax measures such as a capital-gains tax on baht-denominated trades could be considered.