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Most gold shops will cease selling bullion on weekends from next month, due to increased global market volatility, the Gold Traders Association said yesterday.

"Right now there are mainly large orders to buy and sell bullion, so we have to turn to the international market, which is closed on weekends. As a result it's better to suspend business than to avoid increased risk," president Jitti Tangsithpakdi said.

However, gold ornaments will still be available on weekends as usual.

Each bullion buyer will also be subject to a quota of 10 baht (150 grams) at most member shops.

Due to the growing business in gold bars on weekends, when the international market is closed, merchants are afraid they could face excessive exposure due to the lack of timely international-market references.

The swings in the global gold price causes gold prices in Thailand to fluctuate wildly by several hundred baht money per baht weight per day, Jitti said.

Over the past few weeks, global gold prices have fallen steadily amid the worldwide credit crisis and have bounced around from speculation, he said.

Most gold traders do not want to deal in bullion, so the association was asked to make a public announcement on this matter to avoid complaints from customers, many of whom come from the provinces to buy gold bars in Bangkok.

In London, gold yesterday headed for its steepest weekly decline in more than a quarter century, as the rising dollar curbed investor demand for the precious metal. Bullion has declined 13 per cent in the past week, the biggest drop since the week ending March 14, 1980, as the dollar rose to a 23-month high against the euro and a five-and-a-half-year high against the pound.

Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, has stalled after reaching a record 770.6 tonnes on October 10. Holdings fell to 747.1 tonnes yesterday.

"Any financial-market movements are being interpreted as bearish for precious metals," Walter de Wet, an analyst at Standard Bank in Johannesburg, wrote in a note yesterday. "The worst culprit is the greenback."

Gold for immediate delivery fell $34 (Bt1,200), or 4.7 per cent, to $687.45 an ounce late yesterday morning in London. Gold futures for December dropped $26.60, or 3.7 per cent, to $688.10 in electronic trading on the Comex division of the New York Mercantile Exchange.