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[SINGAPORE] Along Bangkok's bustling Yaowarat Road, where Chinese traders haggled over gold with Siamese merchants more than a century ago, customers crowd the counters of jewelry shops looking for bargains.
Like the rest of Asia, which accounts for more than 60 per cent of the world's gold buying, the people of Thailand are snapping up necklaces, bracelets and ingots at the start of the year, adding to demand from Western investors who are buying bullion as a haven from financial turmoil.
Business is brisk for shop owners like Sathira Phuakpraphun, especially after global prices fell last month to the lowest in more than five years. He needed a new supplier because the old one ran out just as demand picked up before Chinese New Yearin February.
"Gold is cheap," said 35-year-old Sathira, after ordering 10kg of bars and jewelry for his new shop near the airport. "I'm buying now because I expect prices to increase before the New Year."
Demand is accelerating in Thailand, where people have long considered gold a valued gift and a way to preserve wealth, no matter how small. Rising imports by Southeast Asia's top consumer underscore the flow of bullion from west to east that helped make China and India the biggest users. Switzerland was a net exporter in November for the first time in a year, with 37 per cent of shipments going to China and Hong Kong and 48 per cent to India, UBS Group AG has said.
Gold has declined for three years and slumped more than 40 per cent from its record in 2011 as equity markets rallied and the prospect of rising US borrowing costs eroded the appeal of an asset that doesn't pay interest. Holdings in exchange-traded funds fell to the lowest in almost seven years.
Now bullion is climbing. Prices have added more than 4 per cent since they touched US$1,046.44 an ounce on Dec 3, the lowest level since February 2010. Turmoil in global financial markets has boosted demand for a haven and investors have increased assets in exchange-traded funds by more than 3 per cent since the start of January, data compiled by Bloomberg show.
Before prices strengthened, Thailand was already stocking up. Purchases expanded 7 per cent from a year earlier to 172 metric tons in the first 11 months of 2015, while sales overseas totaled 120 tons, government data show. Consumption in India and China rose 13 per cent in the third quarter from a year earlier, according to data from the London-based World Gold Council.
Thailand's biggest buyer, YLG Bullion International Co, will boost purchases by about 25 per cent to 160 tons this year, Chief Executive Officer Pawan Nawawattanasub said in an interview in Bangkok on Jan 13. MTS Gold Group, another top importer, will increase shipments by more than 40 per cent to 50 tons, Managing Director Golf Hirunyasiri said. Both companies also export gold.
The country's people have proved persistent bargain hunters. When global prices dropped 6.8 per cent in November, the most in more than two years, MTS imported as much as 1.5 tons a week to meet surging demand, Mr Golf said.
"Thai people love gold because this is our culture," Ms Pawan said. "Everyone holds some gold, no matter how big or how small."
Gold stores and goldsmiths are found throughout the country. Golf from MTS estimated there are about 7,000 shops, including pawn and mom-and-pop outlets. That's approaching the number of 7-Eleven convenience stores, which total around 8,600, according to CP ALL Pcl, the operator in Thailand.
Newborns often receive gold pendants with the sign of the zodiac, and bullion is a popular wedding gift, Ms Pawan said. Shoppers tend to buy when prices fall and big investors stock up when there's a rally, she said. Gold can be kept as a store of family wealth to hand down to the next generation.
"It's a good way to create value for my money - better than a savings account," Jiraporn Thongchuenjit, a 25-year-old woman who runs a small restaurant in Bangkok, said after buying a necklace in a Chinatown store. "I've been buying gold regularly for about two years and will continue to buy it."
The national love of gold is used increasingly to market other products. MTS, an abbreviation of Mae Thong Suk, which roughly means Madam Glittering Gold in the Thai language, says it has about 60 per cent of the deals to supply the bullion used by companies in prizes for consumers.
"If you give out cash, people don't like it," Mr Golf said. "You give out a car, people don't like it. You give out gold, people are very happy."