On August 23, 2026, Thailand's precious metals market hit another milestone as gold prices broke through the $2,600 mark, setting a new historical high. Silver, driven by a surge in AI industrial demand, saw a weekly gain of 9.2%, with expanding supply-demand gaps leading a rebound. Behind this rally, the dual drivers of Thai Baht depreciation and global central bank gold buying have become the core force pushing the market higher. For Thai investors, the correlation between exchange rate risks and precious metals price fluctuations has intensified, making it a key focus to seize this opportunity.

One, Thai Baht Depreciation: The 'Amplifier' of Domestic Gold Price Volatility

Recently, the Thai Baht's exchange rate against the US dollar has continued to weaken, with a depreciation of 1.8% since August, hitting a new low in nearly a year. This trend is mainly driven by two factors: first, the Bank of Thailand maintains relatively low policy rates to stimulate economic growth, increasing capital outflow pressure; second, strong US economic data has led to a rebound in the US Dollar Index, further suppressing the Baht's movement. The impact of Thai Baht depreciation on domestic Thai gold prices is particularly evident—rising costs for imported gold in Thailand have pushed domestic gold prices higher. According to data from Thai precious metals traders, Bangkok gold prices reached 28,500 THB per gram on August 23, up 3.2% from the same period last month, setting a new high in nearly five years.

'Thai Baht depreciation is the 'amplifier' of domestic gold price volatility,' said Patchara Varavarn, a Thai precious metals analyst. 'When the Baht depreciates, the cost of imported gold increases. To maintain profits, traders pass these costs on to consumers, leading to higher domestic gold prices. At the same time, Thai investors are more inclined to buy gold to hedge against exchange rate risks, further boosting demand.'

Notably, the impact of Thai Baht depreciation on silver prices is relatively small, as Thai silver is mainly used for industrial purposes rather than investment or jewelry, so domestic silver prices are more driven by international industrial demand. However, Baht depreciation still indirectly affects silver import costs, leading to a slight increase in domestic silver prices.

Two, Global Central Bank Gold Buying: The 'Stabilizing Force' of the Gold Bull Market

Besides Thai Baht depreciation, continuous gold buying by global central banks is another core driver pushing gold prices to new highs. According to the World Gold Council (WGC)'s latest 'Global Gold Demand Trends Report Q2 2026,' global central bank gold purchases reached 456 tons in the first half of 2026, a new high for the same period. Asian central banks are the main buyers, accounting for over 60%. Although the Bank of Thailand has not disclosed its gold buying data, the market generally expects it to increase gold allocations to diversify foreign exchange reserve risks.

'Central bank gold buying is the 'stabilizing force' of the gold bull market,' said Chen Zhiming, a WGC market analyst for the Asia-Pacific region. 'Central bank gold buying not only increases physical demand for gold but also conveys confidence in 'gold as a reserve asset' to the market, encouraging investors to follow suit.'

Additionally, capital inflows into gold ETFs (Exchange-Traded Funds) have also supported gold prices. Since 2026, global gold ETF holdings have continued to increase, with net inflows of 127 tons since August, a new high in nearly two years. This indicates that institutional investors' demand for gold as a hedge remains strong, especially as geopolitical risks escalate (such as tensions in the Middle East) and expectations of a US economic recession intensify, further highlighting gold's value as a 'safe-haven asset'.

Three, AI Industrial Demand: The 'New Engine' for Silver's Rebound

Unlike gold, silver's rally is more driven by a surge in industrial demand. Recently, the rapid development of the AI industry has boosted silver demand, especially for heat dissipation in AI chips. Silver's excellent thermal and electrical conductivity makes it a core material in AI chip heat dissipation modules. According to data from the Silver Institute, AI industry demand for silver will reach 120 tons in 2026, a 45% increase from 2025, becoming the fastest driver of silver's industrial demand growth.

'AI industrial demand is the 'new engine' for silver's rebound,' said Maria Gonzalez, a market analyst at the Silver Institute. 'As AI chip performance continues to improve, heat dissipation demand will increase, and silver's demand as a heat dissipation material will grow, pushing silver prices higher.'

Besides AI, silver is widely used in electric vehicles, renewable energy (such as solar panels), and other fields. In 2026, electric vehicle production is expected to reach 25 million units, a 30% increase from 2025, driving a 20% growth in silver demand; silver demand in the renewable energy sector will also grow by 15%. The growth of these industrial demands has widened the silver supply-demand gap, pushing prices higher.

From market data, since August 2026, silver prices have risen from $42 to $45.5 per ounce, a weekly gain of 9.2%, setting a new high in nearly three years. Silver ETF holdings have also continued to increase, with net inflows of 567 tons since August, setting a record for the largest single-day net inflow in history.

Four, Market Outlook: Where Are Gold and Silver Prices Headed?

For future market trends, analysts generally believe gold prices still have room to rise, but two key factors need attention: first, the trend of the Thai Baht exchange rate—if the Baht continues to depreciate, domestic gold prices may rise further; second, the dynamics of global central bank gold buying—if central banks continue to buy gold, gold prices will be supported. Additionally, geopolitical risks and expectations of a US economic recession are also key drivers of gold prices.

For silver, industrial demand is the core driver of future price trends. If the AI industry continues to develop rapidly, silver demand will grow, and prices are expected to rise further. However, it should be noted that silver prices are more volatile and sensitive to industrial demand, so investors should be cautious.

For Thai investors, it is recommended to pay attention to exchange rate risks and hedge against exchange rate fluctuations by purchasing gold ETFs or gold futures; at the same time, consider allocating to silver to seize opportunities from AI industrial demand. However, note that precious metals investment carries high risks, and it is advisable to allocate assets reasonably according to one's risk tolerance.

In summary, in August 2026, Thailand's precious metals market, driven by the triple forces of Thai Baht depreciation, central bank gold buying, and AI industrial demand, saw gold and silver prices hit new historical highs. Investors need to closely monitor market dynamics, seize opportunities, and control risks to achieve stable returns in a volatile market.

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