Thailand will impose strict new limits on retail gold trading starting March 1, aiming to curb speculative activity that has strengthened the baht and hurt economic competitiveness. Individual traders face a daily cap of 50 million baht ($1.6 million) per person, per platform, for baht-denominated transactions. The rules exempt US dollar trades, physical gold shops, and futures markets.

The central bank is also requiring full upfront electronic payments and banning nominee accounts and short selling to boost transparency. Officials argue that large baht-denominated gold trades have amplified currency strength, with the baht gaining 9% over the past year - the second-best performance among Asian currencies tracked by Bloomberg. This rally has weighed on exports and tourism, creating headwinds for the economy.

While online gold trading volumes have eased slightly since the measures were first floated, their impact on the currency remains unclear. The 60-day correlation between the baht and gold has climbed to its highest level since September, keeping the currency near 31 per dollar. Policymakers have repeatedly warned that the baht's gains have outpaced economic fundamentals, fueled by speculative gold transactions that drive dollar selling and push the local currency higher.