* Worries of long-term downtrend in prices dull gold's
* Thai political turmoil began in November
* Some investors do not see bullion as a safe-haven
By Apornrath Phoonphongphiphat and A. Ananthalakshmi
BANGKOK/SINGAPORE, May 19 Thai gold imports look
set to stay weak after plunging to a fifth of last year's
levels, with investors shying away from the metal amid prolonged
political upheaval in the country.
Higher imports in 2013, when a sharp fall in gold prices
prompted many consumers to bring forward purchases, have also
sapped demand this year in the world's fifth biggest consumer of
Reduced shipments into Thailand, Asia's No.3 importer, could
take the steam out of any short-term recovery in gold prices
amid slowing growth in appetite for gold in the rest of
"Investment interest in gold is a lot less because prices
have been trending downwards (from the beginning of last year),"
said Pawan Nawawattanasub, chief executive at YLG Bullion,
Thailand's top gold importer.
"Another reason has been ... the long protests have hurt the
economy and people would rather hold on to their money than
spend on gold."
Gold is often viewed a safe-haven asset during times of
political uncertainty, but in a prolonged crisis with declining
business and consumer confidence, would-be buyers can prefer to
save cash than invest in gold bars or splurge on jewellery.
Sales at YLG have fallen 30 to 40 percent this year compared
to the same period in 2013, Pawan said.
Thailand has been in turmoil since anti-government protests
flared up in November, the latest phase in nearly a decade of
antagonism between the Bangkok-based establishment and
supporters of former premier Thaksin Shinawatra.
The country has been run since December by a caretaker
administration with limited fiscal powers and there is no end in
sight to the crisis as protest groups seek to install an
Consumer confidence is at a 12-year low, tourists are
staying away from Bangkok and public spending has been delayed.
Thai gold imports fell 81 percent to 36.351 tonnes in the
first quarter of this year, compared with 192.391 tonnes in the
same period in 2013, according to data on the central bank's
"The sharp fall in gold imports this year is due to higher
global prices, which have limited import demand at a time when
most Thai gold traders are well stocked," said Jitti
Tangsithpakdi, president of Thailand's Gold Traders Association
He added that traders had imported a lot last year due to
lower prices at that time.
Gold prices fell 28 percent in 2013 after a 12-year bull
run, unleashing a frenzy of physical buying across the world.
This year, gold has gained about 7 percent, but some analysts
say the fundamental factors supporting it are still
Late last year, the Thai central bank asked gold traders to
start disclosing information on their trades due to suspicions
that gold imports were being used in currency speculation,
according to YLG Bullion.
The Bank of Thailand (BOT) wanted gold brokers and traders
to submit documents about their transactions outside the Thai
bourse's futures exchange, local media reported.
The BOT declined to confirm to Reuters whether it had
introduced such regulations.
ANZ analyst Victor Thianpiriya said the BOT's move,
following instances where there were substantial discrepancies
between nominal U.S. dollar values for imports and the volume of
gold actually imported, has also had an impact on imports this
"The clamping down on this practice has raised the
administrative burden on all gold importers, with traders
required to show evidence of underlying gold trades, to access
the foreign currency used to pay for imports," Thianpiriya said.
YLG's Pawan said imports at her firm were not affected by
the BOT step as it had had time to get used to the development.
In response to questions on whether the central bank had
made any other moves this year to curb gold imports, BOT
spokeswoman Roong Mallikamas said no steps had been taken to
regulate the gold market.
"In 2014, the attractiveness of gold has diminished as its
price has come down from the peak. (Thais) were previously
driven into gold to seek higher returns, and now they are no
longer expecting highly attractive gains from buying gold,"
(Additional reporting by Orathai Sriring in Bangkok; Editing by