Why Isn't Investment Silver A Thing in Thailand?

[PhiPhi]

I get that gold is king of the PM's but can't figure out why .999 silver bullion is nowhere to be seen in Thailand, the closest I can find is .999 jewellery shot.  Thailand is one of the world's biggest producers of quality sterling silver jewellery, however, back in 2016 I only found one gold shop in Bangkok selling imported PAMP silver assay bars at a hefty premium which I think were more of a novelty (I still brought them all).  I was wondering if anyone knows or could posit a reason for this especially in a country that realises the benefits that PM's can offer in long term wealth preservation?

[Barnabe]

I’m a huge silver fan, but I don’t think you can compare it to gold when it comes to investment or appeal to the general public. 
 

Silver always has been second rate as it is a more usable day to day / industrial material since Roman times and... looks less shiny.

 

And if you don’t have a lot of money to invest in both, gold is generally preferred.

[Airalee]

100-1000 oz bars are quite cumbersome.  I can’t imagine what the markup on a 500oz monster box of Silver American Eagles would be.

[PhiPhi]

I buy .999 silver shot and pour my own bars 2 to 5 Ozt both graphite and wood molded.  For retail bullion I pay premiums of about between $3 to $7 USD per ounce for 10 Oz RCM bars, $5 to $8 for Canadian Maple Leafs and $10 for Maple Leaf Cougars (My favourites), slightly low premiums for Rand or Heraeus 1 Oz bars.  Shipment and insurance costs are about $40 from Singapore and duty is just a flat 7% VAT if each shipment is below $500 (baht equivelent).  2020 American Eagles are within that range with the discount for 500 being $0.25 per Ozt.

Edited August 11, 2020 by PhiPhi
Clarify Baht Equivelent

[Airalee]

1 hour ago, PhiPhi said:

I buy .999 silver shot and pour my own bars 2 to 5 Ozt both graphite and wood molded.  For retail bullion I pay premiums of about between $3 to $7 USD per ounce for 10 Oz RCM bars, $5 to $8 for Canadian Maple Leafs and $10 for Maple Leaf Cougars (My favourites), slightly low premiums for Rand or Heraeus 1 Oz bars.  Shipment and insurance costs are about $40 from Singapore and duty is just a flat 7% VAT if each shipment is below $500 (baht equivelent).  2020 American Eagles are within that range with the discount for 500 being $0.25 per Ozt.

Running those numbers with silver @ $29/oz let’s use the Cougars as an example.  Just using rough numbers here so bear with me.
 

$10oz premium  (means less than $500 would be 12-13 coins) 

 

+ $3oz premium (shipping)

 

+ another $3oz for VAT (7% of $500).

 

so...$16 premium on $29 spot price

 

thats over 50% premium over the spot price.   Compared to the buy sell spread here for gold, I think that answers your question as to why Thais aren’t buying silver for investment.

[RichardColeman]

People talking gold and silver.....

[PhiPhi]

4 hours ago, Airalee said:

Running those numbers with silver @ $29/oz let’s use the Cougars as an example.  Just using rough numbers here so bear with me.
 

$10oz premium  (means less than $500 would be 12-13 coins) 

 

+ $3oz premium (shipping)

 

+ another $3oz for VAT (7% of $500).

 

so...$16 premium on $29 spot price

 

thats over 50% premium over the spot price.   Compared to the buy sell spread here for gold, I think that answers your question as to why Thais aren’t buying silver for investment.

These are current "COVID" numbers (sorry I should have made that clear), bars and rounds could be produced locally in the same way that gold is which would negate delivery costs and volume restrictions.  Silver has only been above $20 for a few weeks,  globally premiums are up at 25% to 30% due to extreme tightness in the supply chain for bullion products.

[soi3eddie]

I like the idea of silver as a speculative investment however it can't compete with the bling and tradeability of gold here in Thailand.

Edited August 11, 2020 by soi3eddie

[Airalee]

21 minutes ago, PhiPhi said:

These are current "COVID" numbers (sorry I should have made that clear), bars and rounds could be produced locally in the same way that gold is which would negate delivery costs and volume restrictions.  Silver has only been above $20 for a few weeks,  globally premiums are up at 25% to 30% due to extreme tightness in the supply chain for bullion products.

I’m just taking a shot in the dark based off your numbers.  Shipping would still be high and I can imagine that there would be more than just 7% VAT (such as an additional customs duty) if people were buying in “investment” quantities.  Other than that, I dunno why they don’t invest in silver.  Could be something as simple as they don’t like the color...or just consider it “cheap jewelry” compared to their gold?  I don’t see platinum or palladium here either.  
 

And regarding the dealer premiums...They always seemed high for me when I bought coins from Apmex.  20%+.   Premiums were much lower on 100oz JM bars (3-5%) from CNI but still far higher than what Thais pay for gold.

Edited August 11, 2020 by Airalee

[PhiPhi]

For sure VAT but somehow silver shot is pretty close to spot or at least was when I brought a few years ago.  Thailand like many countries had a tradition of using silver as money going back to the Funan Kingdom (1st century AD), up until 1928 Thai bank notes held a promise to pay the bearer x Baht (15g) in silver as per the denomination.  I was more interested in the historical reasons as to how and why silver bullion dropped off the radar, the only thing I can think of is maybe silver bullion is just a colonial remenant which explains availability in HK, Singapore and Malaysia.

Edited August 11, 2020 by PhiPhi

[Airalee]

8 minutes ago, PhiPhi said:

For sure VAT but somehow silver shot is pretty close to spot or at least was when I brought a few years ago.  Thailand like many countries had a tradition of using silver as money going back to the Funan Kingdom (1st century AD), up until 1928 Thai bank notes held a promise to pay the bearer x Baht (15g) in silver as per the denomination.  I was more interested in the historical reasons as to how and why silver bullion dropped off the radar, the only thing I can think of is maybe silver bullion is just a colonial remenant which explains availability in HK, Singapore and Malaysia.

I’d bet that most Thais (other than wonk historian types) wouldn’t be able to tell you anything about 1928, let alone their monetary system.  Of all the Thai (And foreign for that matter) people I know, I’m the only person who has been to the BOT museum of money and textiles in Chiang Mai (was bored one day so just went and checked it out).  Maybe somebody there would have a better answer...but I doubt it.  
 

I doubt even many gold (or precious metals of any kind) dealers would have much to say beyond “Because Thai people like gold”.

 

If you can get silver shot close to spot...cool...but I think here it would only (or primarily) be of use to a jewelry maker (such as the ones in the silver making area in Chiangmai).  Even in the US, people owning silver for investment is kind of a niche thing.  Most would just own a few shares of SLV.

[swissie]

The subject of precious-metal coins has come up here. A few words about precious-metal-coins. Nice to have as part of an inheritace, benefitting ones grandchildren.
Other than that, coins are illiquid (even in Zuerich). That means that the BID/ASK spread is massive. (some call it "markup").
Coins are not for investement purposes. Or would anyone buy a stock, when the Broker-Commission would be 15% to start with?
Just a general comment about "coins" as an invetement vehicule.

[PhiPhi]

To answer Swissie's question if you believe a commoditiy is grossly under priced even when commissions are taken into account it can be still be a good buy.  More to the point investment covers a very broad spectrum of financial decisions and objectives, for some wealth preservation absent of counterparty risk might be the objective but for others like a broker or trader that would be a fatal strategy.  Coins do have a place in private investment, with regards to limited series issues the numismatic appreciation for some coins do extremely well, for general government issued bullion like the Maple Leaf, Austrailian Kangaroo, Britannia or ASE they are very recognisable and in the case of the former 2 have good security features.  On the whole I agree they are not the most efficient way to buy silver but it does have it's merits.

[J Town]

I'm thinking of investing in tulip bulbs. They're bound to come back some day.

[englishoak]

 

Back in the 90s to early 2000s silver was big thing in Thailand  silver shops everywhere, half the khaosan rd shops were selling silver jewellery and lots of silver smiths abounded all over the kingdom, so there was a lot of raw silver availability for industrial/jewellery use, you could buy reels of the stuff in different finesse and thickness and i could have taken you to dozens of silversmiths using it,  but not investment bars apart from some Chinese ones. Surin silver was truly awful quality but good for resale. Silver Thai style rope/amulet Chains were a thing so were amulet cases and one off bracelets and custom work, this was usually by far the highest quality silver when we tested it and easier to resell, so thats what we kept as an investment while running as silver import export business back in the day, its the only way we found to invest in silver in Thailand I doubt its changed much.

 

A Thai friend has been collecting/investing in Thai silver jewellery since the 90s and has literally hundreds of kilos of the stuff, naturally hes an expert at testing the grade and always buys just over or at spot, He also has a nice collection of coins and bars from all around the world but very little bought in Thailand.  As as others have said investment coins/bars just isnt a thing in Thailand  

Edited August 12, 2020 by englishoak

[giddyup]

If Thailand is one of the biggest producers of silver jewellery it must be all exported because I can't find any except the cheap trinkets sold in shopping malls. I can't think of one shop in Pattaya that specialises in good silver jewellery.

[pineapple01]

Looks like Rubbish, thats why.

[1FinickyOne]

On 8/11/2020 at 10:34 AM, PhiPhi said:

back in 2016 I only found one gold shop in Bangkok selling imported PAMP silver

you might have checked silver shops.. the gold shops probably don't sell sandals either.. 

[giddyup]

19 minutes ago, kenk24 said:

you might have checked silver shops.. the gold shops probably don't sell sandals either.. 

What silver shops? Maybe there is the odd one in Bangkok, none in Pattaya that I'm aware of.

[1FinickyOne]

1 hour ago, giddyup said:

What silver shops? Maybe there is the odd one in Bangkok, none in Pattaya that I'm aware of.

they are mostly selling silver jewellery... 

[SteveK]

There's couple around Khao San area.

[blackcab]

A troll post has been removed.

[1FinickyOne]

6 hours ago, giddyup said:

What silver shops? Maybe there is the odd one in Bangkok, none in Pattaya that I'm aware of.

I used to buy silver in Bangkok and Chiang Mai but it was in jewellery form... and sold by weight... a couple of yrs ago met a fellow in CM who was buying silver for investment... 

 

I think pattaya has other forms of currency.. 

[giddyup]

12 hours ago, kenk24 said:

I used to buy silver in Bangkok and Chiang Mai but it was in jewellery form... and sold by weight... a couple of yrs ago met a fellow in CM who was buying silver for investment... 

 

I think pattaya has other forms of currency.. 

I was talking about good quality silver jewellery.

[1FinickyOne]

typical quality was 92.5 silver... 

 

I guess if you get a wise solicitor, you could use that for currency in Patt. - I hear times are tough.

[unblocktheplanet]

On 8/11/2020 at 12:58 PM, Airalee said:

Running those numbers with silver @ $29/oz let’s use the Cougars as an example.  Just using rough numbers here so bear with me.
 

$10oz premium  (means less than $500 would be 12-13 coins) 

 

+ $3oz premium (shipping)

 

+ another $3oz for VAT (7% of $500).

 

so...$16 premium on $29 spot price

 

thats over 50% premium over the spot price.   Compared to the buy sell spread here for gold, I think that answers your question as to why Thais aren’t buying silver for investment.

Will you please run the same numbers for physical gold at current rates?

[Airalee]

9 minutes ago, unblocktheplanet said:

Will you please run the same numbers for physical gold at current rates?

Why?  There is probably a gold shop within 1km of you.  If not... https://www.huasengheng.com

[rken2]

Just buy shot silver at a little more than spot and melt it and cast it yourself. easy