Thailand: the surge in gold propels the baht, but temporarily

The spectacular rise in gold prices supports the Thai baht at the beginning of the year, but the currency is expected to weaken in the second half.

Standard Chartered Bank (Thailand) expects the baht to continue to appreciate against the US dollar in the first quarter of this year, in line with the global rise in gold prices.

However, the bank notes that the Thai currency should return to its fundamental level in the second half of the year.

This Tuesday, January 27, 2026, 1 euro is worth 37.10 baht and 1 US dollar is worth 31.20 baht.

See: Thai baht (THB) exchange rate: daily rate against the euro

Gold at its highest, a temporary driver of the baht's rise

A gold seller counts a bundle of 1,000 baht notes. Photo: CTN

According to Tim Leelahaphan, senior economist at Standard Chartered for Thailand and Vietnam, global gold prices have now reached around $5,100 per ounce, a rise of about 20% since the start of the year, exceeding the bank's forecasts.

From a global perspective, Standard Chartered expects a further rise in gold prices, which should reach $5,150 per ounce by the end of the year, he said.

According to the economist, the sharp rise in the price of gold has continued to put upward pressure on the baht, which has strengthened to around 31.08 baht per dollar on Monday.

Baht decline expected in the second half

A foreign tourist exchanges money at a currency exchange office in Bangkok. Photo: Somchai Poomlard/Bangkok Post

Tim expects the baht to start depreciating against the dollar from the second quarter and into the second half, reaching around 33 baht per dollar by mid-year.

By the end of 2026, the baht is expected to weaken further to around 33.50 baht per dollar, in line with Thailand's economic fundamentals.

Bank of Thailand: measures expected to curb gold-related flows

Bank of Thailand. Photo: Money and Banking Online

Tim added that the bank would continue to closely monitor measures taken by the Bank of Thailand to curb local gold trading in US dollars on digital platforms.

See: Thailand: Crackdown on illicit money and gold to stabilize the baht

The central bank is expected to issue the corresponding notification on January 29.

"If these measures prove effective in managing the foreign exchange market, they will help mitigate the baht's appreciation against the dollar and allow the currency to move more in line with economic fundamentals," he said.

In this scenario, the baht could depreciate from the second quarter to the second half of the year, in line with a stronger US dollar, driven by changes in US Federal Reserve interest rates and US economic outlook.

Sluggish growth and declining rates: a fragile economic context

Illustrating the Thai economy. Source: The Nation Thailand

In addition, Tim stated that the bank expected the Monetary Policy Committee (MPC) of the central bank to lower its key rate at its meeting next month, bringing it down from 1.25% to 1% in order to support Thailand's slowing economic growth.

The bank estimates Thailand's GDP growth at 2% in 2026, with growth of only 0.7% in the first half, mainly due to delays in the disbursement of the 2027 fiscal budget caused by national political factors.

The formation of a new government is expected to be completed by June 2026, while the disbursement of the 2027 fiscal budget could be delayed until January next year.

See: Thailand: general elections will take place on February 8, 2026

Although we expect some uncertainty or political unrest after the February 8 elections, we do not foresee a scenario of political unrest ", said Tim.

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Source: Bangkok Post