Precious metalbody seeks to delay trading in gold futures

 Association chairman Jitti Tangsithpakdi yesterday said that trading the metal in the Thailand Futures Exchange (TFEX) might adversely affect more than 7,000 gold shops around the country, as investors would shift from physical to paper gold.

Gold futures trading might also cause social problems as investors, who do not have knowledge about paper gold investment, could suffer losses, he said.

He urged the Finance Ministry and the securities watchdog to carry out a study about paper gold trading before allowing gold futures trading to debut.

TFEX managing director Kesara Manchusree said efforts were being made, along with the Futures Industry Club, to seek ways for gold shops and large gold traders to par¬ticipate in the futures trading busi¬ness.

He said talks were under way with the SEC.

There are several possible choic¬es for physical gold traders. For example, they might serve as an introducing agent by suggesting cus¬tomers to futures brokers and get¬ting a fee from the role, she said.

Also, gold traders might join hands with futures brokers to open branches, or they might be allowed to become paper brokers, she added.

"In the end, we believe that we will find a solution and it will be a blessing to investors and gold shops," Kesara said.

Regarding progress of the planned futures trad¬ing in the precious metal, Kesara said TFEX was approaching many bro¬kers to be marketmak¬ers. KGI Securities (Thailand), Polaris Futures and Globlex Securities have all been invited by TFEX to play such a role.

"KGI Securities and Polaris Futures are TFEX's current marketmakers, while Globlex Securities has an affiliate firm engaged in the gold trading business. These firms have expressed interest to be marketmakers for gold futures trading, so we believe that liquidity in the mar¬ket would be enough to allow investors to use it in making profit and managing risk efficiently," she said.