(16 Apr 2020) Gold shops in Bangkok's Chinatown saw long lines of people waiting to exchange their gold for cash on Thursday, as prices reached a seven-year high amid the coronavirus pandemic. Owners of the shops claim they are facing a liquidity crunch, as they are unable to quickly resell the gold abroad due to flight restrictions and a shortage of buyers in other countries, hindered by lockdowns and market closures.
On Wednesday, Thailand's Prime Minister Prayuth Chan-ocha urged the public to sell gradually, heeding calls from the industry.
The price of gold has been rising since the coronavirus crisis began, which is the usual pattern in times of uncertainty as people seek what they believe is a hedge against uncertain financial markets.
Earlier this week, it hit $1,731.25 an ounce, the highest since late 2012.
In many East Asian cultures, people hold gold as savings and investments.
Gold shops clustered in Bangkok's Chinatown are bound by tradition to buy back the products they sell, and prices are fixed by an industry association.
In Thailand, where measures against the spread of COVID-19 have been less severe than in other countries, gold shops are de facto financial institutions, and generally remain open.
Some say they are selling their gold to get cash for living expenses for their families, as the coronavirus crisis has cut or eliminated incomes for many, especially in service jobs.
A government plan to offer relief to families by providing monthly stipends of 5,000 baht ($153) has got off to a rocky start, as the money has just started flowing to a fraction of the millions of people who applied online for the assistance.
Prayuth also warned on Wednesday that it appeared the government currently only had enough funds to pay for one month of the promised three-month safety net package.
The global pandemic has sickened more than 2 million people, killed more than 137,000 worldwide, crippled economies and forced restrictions on the movement of millions of people in an effort to stop the virus from spreading further and overwhelming health care systems.
According to the Johns Hopkins University, Thailand has 2672 confirmed COVID-19 cases and 46 deaths.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough, that clear up in two to three weeks. But it can cause more severe illness, including pneumonia, and death for some people, especially older adults and people with existing health problems.
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