Is Thai Gold A Good Safe Investment?

[Bangyai]

Its worth its weight in gold !!

[englishoak]

IMO There is a simple rule I follow. Never jump on the bandwagon late, If you do you blindly follow the trend you will almost certainly become a casualty of the inevitable "correction".

If I bought Gold for instance it would be when i am sure it's about corrected or oversold. I would only buy Gold for the longterm as "insurance" not a quick way to make money. There are much more stable ways to do that.

For the record I think we are having a shake out in commodities atm and I expect gold will continue it's down/sideways trend for the time being before resuming it's bull.

[ray08]

Gold is a comodity , it,s price is tied to speculation, not to real demand , the price has no fundamentals ,the price has doubled over the past few years but not the demand , eventually these big Hedge/pension funds will take their profit and move the funds elsewhere ,even at today,s price it is way overpriced for the demand , as for a means of insurance ,against what ?? if the world economy breaks down and we need to rely on gold ,back to dark ages for everyone ,gold won,t save you.

[englishoak]

It won't save you but will still be worth more than a worthless fiat currency. Call it an emergency fund if you like, eg if the £ bombs i'm sure that the gold will still be higher somewhere else in the world, ask anyone in Zimbabwe .

As far as way overpriced for demand goes, I would'nt be too sure about that. The Indians and Chinese account for a very high % of commercial Gold sold and it's increasing rapidly as China continues it's epic growth.

[Naam]

Its worth its weight in gold !!

a good one! joke aside, there is no such thing as "intrinsic" value of any asset. that goes for precious metals as well as for any other asset too. the value of any asset is based on offer and demand. a few weeks ago i read a posting "and silver will go soon to $30/ounce" at that time the spot price was near $20. presently silver trades @$12.97

[Martian]

If you are buying any type of gold, do so with a long-term buy and hold strategy and have a place to secure it. I bought 10 Baht of gold when I got married in Thailand in 2000. We bought it at 5,800 per baht and it is now 12,900 per Baht from what I see on Bangkok Post newspaper front page. That is about a 15% annual appreciation rate if you ROUGHLY make the calculations. 122% increase / 8 years = about 15% per year. Of course that doesn't take into account compounding so the effective annual rate is somewhat less than 15% but it gives a rough idea

Again, just a rough estimate.

Martian

[ray08]

It won't save you but will still be worth more than a worthless fiat currency. Call it an emergency fund if you like, eg if the £ bombs i'm sure that the gold will still be higher somewhere else in the world, ask anyone in Zimbabwe .

As far as way overpriced for demand goes, I would'nt be too sure about that. The Indians and Chinese account for a very high % of commercial Gold sold and it's increasing rapidly as China continues it's epic growth.

If you look at the jewellery sector which is the main consumer of gold ,i think India was down about 50% this year ,UK Assay office i think imports down about 20% , do not have figures in USA or Australia ,but markets are down, Also for example in the UK a lot of increase business in secondhand market where people selling gold back

, Gold unlike oil ,pig bellies, coffee etc is not a commodity that is consumed. only changes form , infact gold is constantly refined , so in regards to supply plenty around as what has been dug up is still here ,

[Naam]

If you are buying any type of gold, do so with a long-term buy and hold strategy and have a place to secure it. I bought 10 Baht of gold when I got married in Thailand in 2000. We bought it at 5,800 per baht and it is now 12,900 per Baht from what I see on Bangkok Post newspaper front page. That is about a 15% annual appreciation rate if you ROUGHLY make the calculations. 122% increase / 8 years = about 15% per year. Of course that doesn't take into account compounding so the effective annual rate is somewhat less than 15% but it gives a rough idea

Again, just a rough estimate.

Martian

it's all about timing, looking at a specific period as well as calculating the gold price in a specific currency. the situation and the yields, respectively the losses, change dramatically if these factors are changed. worst example is the period 1980-2000, gold down from over $800 down to $250. is losing 70% of the capital over a period of 20 years better than 'fiat money'?

[Naam]

But silver, palladium and platinum are a different story. There are many, many uses for these metals and as such make them a "real" commodity. I am cost averaging into all of them on a monthly basis and love the fact that they are in a pull back at the moment.

pullback? hmmm...

[VegasVic]

If you are buying any type of gold, do so with a long-term buy and hold strategy and have a place to secure it. I bought 10 Baht of gold when I got married in Thailand in 2000. We bought it at 5,800 per baht and it is now 12,900 per Baht from what I see on Bangkok Post newspaper front page. That is about a 15% annual appreciation rate if you ROUGHLY make the calculations. 122% increase / 8 years = about 15% per year. Of course that doesn't take into account compounding so the effective annual rate is somewhat less than 15% but it gives a rough idea

Again, just a rough estimate.

Martian

Ah yes another astute gold investor who just happened to buy his gold at the very bottom and now is showing his paper returns while gold is still in its bubble. I could go into the compounding issue and show how gold has been among the worst investment vehicles throughout recorded history, but that would just be like shooting fish in a barrel! Instead I will just earmark this post and two years from now when gold is back at 5,800/baht I will bring it back and it will all be self explanatory, even to the most foolish of investors that gold is not a good investment, it is at times a good trading vehicle at best. Something tells me that when gold does sink back to 5800/baht and I bring this back, that our "long term " gold investor here will all tell us that he sold his gold shortly aftter this post here. Gold is at its best when worn around a beautiful womans neck, as far as industrial demand for gold goes it has been in a decline since the early 1990's and will continue that trend for the foreseeable future.

[Naam]

Yes. Pullback.

This is not a trade as such, but a long term investment.

if it makes you happy you have my blessing. personally i abhor any investment that has no cash yield but might lose 36% in mere six months.

p.s. i'd call that "long term speculation".

Edited September 4, 2008 by Naam

[Naam]

Gold is at its best when worn around a beautiful womans neck...

it too looks good on ugly women

[Naam]

as far as industrial demand for gold goes it has been in a decline since the early 1990's and will continue that trend for the foreseeable future.

don't forget that India and China import a multiple of industrial demand for private use. this trend is presently down but it will pick up again.

[Naam]

1. Ah yes another astute gold investor who just happened to buy his gold at the very bottom and now is showing his paper returns while gold is still in its bubble.

2. I could go into the compounding issue and show how gold has been among the worst investment vehicles throughout recorded history, but that would just be like shooting fish in a barrel!

1. that's not a fair statement Vic

2. BINGO!

[Naam]

Every man is where he is today because of the choices he made...

i have no other choice but to agree with you.

[BEENTHEREDONETHAT]

If you are buying any type of gold, do so with a long-term buy and hold strategy and have a place to secure it. I bought 10 Baht of gold when I got married in Thailand in 2000. We bought it at 5,800 per baht and it is now 12,900 per Baht from what I see on Bangkok Post newspaper front page. That is about a 15% annual appreciation rate if you ROUGHLY make the calculations. 122% increase / 8 years = about 15% per year. Of course that doesn't take into account compounding so the effective annual rate is somewhat less than 15% but it gives a rough idea

Again, just a rough estimate.

Martian

it's all about timing, looking at a specific period as well as calculating the gold price in a specific currency. the situation and the yields, respectively the losses, change dramatically if these factors are changed. worst example is the period 1980-2000, gold down from over $800 down to $250. is losing 70% of the capital over a period of 20 years better than 'fiat money'?

I was one of the brillant investors that bought gold in the early 80's. In the form of gold coins which cost a premium, closer to $850 than $800. So for a 25+ year investment I don't consider the return to be really great. Still have some krugerands, mapleleafs and chinese Pandas. I have done much better on real estate than anything else.

[london]

I am possibly a little different in my approach to "physical" gold (bullion, ingots, bars, coins etc).

I had accumulated a fair amount of it over the last 6 years and unloaded a majority of it late last year. I did NOT buy it as an investment per se, however, but when I was looking at such a huge return (from $295 - $328 when I was buying to $947 when I sold)...well, I would have been stupid not to take advantage of that run up. I should add that I didn't buy at the bottom nor did I sell at the top.

So WHY did I buy it originally? Simple: for me it is an "insurance" policy that I am able to cash in anytime. My reasoning was/is that IF the financial world collapses, it will still be worth something. Frankly, I don't expect that to happen, that is why I only ever have a small percentage of my assets tied up in it. That said, I will buy more when I feel it has got back to more realistic levels, and this will not occur until the financial crisis gripping the world is over...possibly 2 years from now.

So my view is "yes" buy physical gold, but as has been said earlier, don't buy it on the hype and don't buy it as an investment. Wait until it is unloved...again.....and believe me, that will happen in the future.

IF you want to "invest" in gold, buy gold stocks....that way, you get the some of the benefits of owning physical gold but with a different form of liquidity and if you are lucky, with a dividend.

[Spee]

Had a question about bullion. If one wanted to, where would bullion typically be bought? Can bullion be bought at the traditional jewelry stores, such as those in the Yaowarat area? Is there a minimum amount, or can it be bought in increments of a few coins? Don't really wish to engage in the good/bad/investement debate. Was just looking for answers to some basic questions.

[Wrong Turn]

So my view is "yes" buy physical gold, but as has been said earlier, don't buy it on the hype and don't buy it as an investment. Wait until it is unloved...again.....and believe me, that will happen in the future.

I agree. Gold is still high.

IF you want to "invest" in gold, buy gold stocks....that way, you get the some of the benefits of owning physical gold but with a different form of liquidity and if you are lucky, with a dividend.

Gold ETFs, good and sound as a general investment in gold?

You can short gold with ETF short funds, too?

[london]

Gold ETFs, good and sound as a general investment in gold?

You can short gold with ETF short funds, too?

100% correct.

Had a question about bullion. If one wanted to, where would bullion typically be bought? Can bullion be bought at the traditional jewelry stores, such as those in the Yaowarat area? Is there a minimum amount, or can it be bought in increments of a few coins? Don't really wish to engage in the good/bad/investement debate. Was just looking for answers to some basic questions.

Any of the gold shops in Yaowarat will sell you gold, mostly with their own "hallmark", and is usually bought in a weight called baht. From memory, but please forgive me if l am incorrect, the minimum weight is 10 baht. l don't remember the equivalent of baht to ounces....sorry.

The gold buying/selling price is clearly displayed in the windows.

I hope this answers your questions.

[Xangsamhua]

My question is a bit different and comes from one who has no idea of how things work.

I own a house overseas, have some money in the bank (here and OS) and some superannuation (OS). My wife loves gold, however, and we have a little bit of cash available.

I like cash. It buys me things like air tickets, hotel rooms, small luxuries, etc. However, I know what can happen to cash (I was here in '97). I like gold, too. It's good to have it on hand if required. However, what proportion of my available funds (say $30,000) should I spend on gold and how much keep in the bank?

I don't want to have lots of gold (that my wife becomes attached to) and no cash; but I don't want to have cash that might bleed away either. What's a good balance?

Xangsamhua

[london]

My question is a bit different and comes from one who has no idea of how things work.

I own a house overseas, have some money in the bank (here and OS) and some superannuation (OS). My wife loves gold, however, and we have a little bit of cash available.

I like cash. It buys me things like air tickets, hotel rooms, small luxuries, etc. However, I know what can happen to cash (I was here in '97). I like gold, too. It's good to have it on hand if required. However, what proportion of my available funds (say $30,000) should I spend on gold and how much keep in the bank?

I don't want to have lots of gold (that my wife becomes attached to) and no cash; but I don't want to have cash that might bleed away either. What's a good balance?

Xangsamhua

Frankly Xangsamhua, I wouldn't be owning physical gold...at present.

I understand your experience with cash in the 97 crisis, however, if anything that should indicate a conservative approach may be better. I am not holding onto any physical gold at present (having sold out completely on Monday), nor do l intend to buy more in the foreseeable future. That may change if the gold price comes tumbling down (unlikely). That said, I don't expect it to rocket up either.

Looking at alternatives: I would now be looking at diversifying away from holding just 1 currency. I like the $SIN, possibly the Euro, at these prices the $AU seems undervalued against the $US. But I would only be holding these as currencies where my investments are held, either in bank accounts or in assets in those countries. Assets can be deposits, managed funds, real estate, equities (perhaps even gold shares!!) and other more obscure holdings.

I should state that I am NOT an investment advisor, or anything like that, but I base my actions on what I see and experience in my travels. Basically, what this means is that I don't know anything more than anyone else.....its just my opinion.

Edited September 12, 2008 by london

[Xangsamhua]

My question is a bit different and comes from one who has no idea of how things work.

I own a house overseas, have some money in the bank (here and OS) and some superannuation (OS). My wife loves gold, however, and we have a little bit of cash available.

I like cash. It buys me things like air tickets, hotel rooms, small luxuries, etc. However, I know what can happen to cash (I was here in '97). I like gold, too. It's good to have it on hand if required. However, what proportion of my available funds (say $30,000) should I spend on gold and how much keep in the bank?

I don't want to have lots of gold (that my wife becomes attached to) and no cash; but I don't want to have cash that might bleed away either. What's a good balance?

Xangsamhua

Frankly Xangsamhua, I wouldn't be owning physical gold...at present.

I understand your experience with cash in the 97 crisis, however, if anything that should indicate a conservative approach may be better. I am not holding onto any physical gold at present (having sold out completely on Monday), nor do l intend to buy more in the foreseeable future. That may change if the gold price comes tumbling down (unlikely). That said, I don't expect it to rocket up either.

Looking at alternatives: I would now be looking at diversifying away from holding just 1 currency. I like the $SIN, possibly the Euro, at these prices the $AU seems undervalued against the $US. But I would only be holding these as currencies where my investments are held, either in bank accounts or in assets in those countries. Assets can be deposits, managed funds, real estate, equities (perhaps even gold shares!!) and other more obscure holdings.

I should state that I am NOT an investment advisor, or anything like that, but I base my actions on what I see and experience in my travels. Basically, what this means is that I don't know anything more than anyone else.....its just my opinion.

Thanks for your advice, London. It sounds like I should stick with what I've got - some Aussie dollars in the bank, managed funds, some baht (I'm not planning on leaving LOS in the near future), and some gold because Mrs Xangsamhua really likes it. I thought of buying some more Aussie dollars, SIN$ and/or Euros and may do so soon, probably the former and reduce my baht balances. We're not talking about big money here, but don't want to waste it. Someone suggested that Thai gold is hard to sell outside Thailand. We might take a bit with us next time we go to Oz and see what the Vietnamese gold shops offer us.

Cheers

Xangsamhua

[london]

some Aussie dollars in the bank, managed funds, some baht (I'm not planning on leaving LOS in the near future), and some gold because Mrs Xangsamhua really likes it. I thought of buying some more Aussie dollars, SIN$ and/or Euros and may do so soon, probably the former and reduce my baht balances. We're not talking about big money here, but don't want to waste it. Someone suggested that Thai gold is hard to sell outside Thailand. We might take a bit with us next time we go to Oz and see what the Vietnamese gold shops offer us.

Cheers

Xangsamhua

Hi Xangsamhua,

thanks for your post.

At present, the Baht is high against many currencies and it may be an opportune time to consider diversifying. Whether I would actually BUY $AU, $SIN and or Euro's as such, well, I probably wouldn't as I prefer to hold actual assets rather than currency. That said, possibly balancing out of your Baht holdings into foreign currency accounts may be a good idea. Certainly, as I see it, the interest rates offered in Australia are quite high, but will most likely fall by 1% or so over the next 12 months...but the currency hit the at $AU has taken seems overdone, so in fact you may make something on the currency without even worrying about the interest rate. Who knows ?

Re Thai Gold: I can vouch for the suggestion that it can sometimes be hard to sell out of Thailand. But what I have found is to say to the purchaser: "test it"..which they have then done and their attitude changes to one of acceptance and they are then quite happy to buy it.

Good luck!

Regards

London

[Xangsamhua]

some Aussie dollars in the bank, managed funds, some baht (I'm not planning on leaving LOS in the near future), and some gold because Mrs Xangsamhua really likes it. I thought of buying some more Aussie dollars, SIN$ and/or Euros and may do so soon, probably the former and reduce my baht balances. We're not talking about big money here, but don't want to waste it. Someone suggested that Thai gold is hard to sell outside Thailand. We might take a bit with us next time we go to Oz and see what the Vietnamese gold shops offer us.

Cheers

Xangsamhua

Hi Xangsamhua,

thanks for your post.

At present, the Baht is high against many currencies and it may be an opportune time to consider diversifying. Whether I would actually BUY $AU, $SIN and or Euro's as such, well, I probably wouldn't as I prefer to hold actual assets rather than currency. That said, possibly balancing out of your Baht holdings into foreign currency accounts may be a good idea. Certainly, as I see it, the interest rates offered in Australia are quite high, but will most likely fall by 1% or so over the next 12 months...but the currency hit the at $AU has taken seems overdone, so in fact you may make something on the currency without even worrying about the interest rate. Who knows ?

Re Thai Gold: I can vouch for the suggestion that it can sometimes be hard to sell out of Thailand. But what I have found is to say to the purchaser: "test it"..which they have then done and their attitude changes to one of acceptance and they are then quite happy to buy it.

Good luck!

Regards

London

Many thanks, London. We'll certainly be buying some more aussies in the next month and will also take your advice re checking out sale of Thai gold in Australia.

Best

Xangsamhua

[midas]

Does anyone have any kind of contrarian view on gold as an alternative investment ?

I know gold has always been where the money has ended up in uncertain times as a safe haven, but in

this day and age is is that perception justified? I mean for example you can't eat gold.

In Thailand as an alternative to cash I would prefer to put my money in warehouses full of rice !

I just don't see the attraction of gold ?

In other words, even though there has been been that demand for gold in the past...........in a

very different world today WILL THAT DEMAND ALWAYS BE THERE ?