Crackdown On Gold Traders

[george]

Government clamps down on gold traders

BANGKOK: -- Fearing a worsening trade deficit, the Commerce Ministry has instructed gold shops not to stock up on gold products or speculate on the value of gold, as the price is likely to hit Bt10,000 per 15.2 grams (one baht) before the end of the year.

Yesterday, gold closed at US$497.50 to $498 per ounce (28.35g) in Hong Kong, and is widely tipped to reach the magical $500 mark this week.

Deputy Commerce Minister Preecha Laohapongchana said he had ordered gold shops not to stock up on gold imports as this may affect the country’s trade deficit – as it did earlier this year. If the Commerce Ministry notices any operators increasing the volume of their gold imports “remarkably”, it will order them to report every item in their gold stock, he said.

“I also ordered gold shops to use scales with two decimal places to ensure fairness to customers, because every single decimal point counts,” he said.

Gold Traders’ Association president Jit Tangsitbhakdi said the domestic gold price is likely to hit the Bt10,000 mark by the year-end because speculators have shifted from currency to speculate on the value of gold, which carries no exchange risk.

He believes the gold trade during the coming New Year festival is likely to fall by 20 per cent because the gold price has gone “quite high”.

Yesterday, 15.2g gold bars were being bought for Bt9,550 and sold for Bt9,650. Gold ornaments were priced between Bt9,475 and Bt9,850.

Normally, the gold trade is bullish in December as Thais buy gold during the New Year festivals.

Earlier this year, Thailand faced a high trade deficit as traders imported gold in anticipation of prices continuing to rise on the world market.

--The Nation 2005-11-29

[The_Moog]

speculators have shifted from currency to speculate on the value of gold, which carriesno exchange risk

Thats not true, whilst the shop price may be in baht, it is determined by the prevailing price of bullion, which is set in US Dollars and simply converted to Baht at the current exchange rate.

[solo siam]

Yes, but its failry easy to turn it back into baht.

[Firefan]

Interesting signal..... Gov trying to block the free market forces will probably work well...

Cheers!

[richard10365]

Government clamps down on gold traders

Yesterday, 15.2g gold bars were being bought for Bt9,550 and sold for Bt9,650.

--The Nation 2005-11-29

<{POST_SNAPBACK}>

I'm not sure I understand the gold trade. Who is the person buying for Bt9,650 and why dosn't he shop where the person who is buying for Bt9,550?

[Firefan]

Rich; it is called a bid/offer spread - that is the profit of the intermediary - in this case the gold shop, with stocks it is the broker earning the bid/offer spread.

Naturally the gold seller could just stand with his gold bars in Silom road and yell - "gold bars for sale!" and try to get a slightly better rate - but at what risk?

Cheers!

[lopburi3]

Government clamps down on gold traders

Yesterday, 15.2g gold bars were being bought for Bt9,550 and sold for Bt9,650.

--The Nation 2005-11-29

<{POST_SNAPBACK}>

I'm not sure I understand the gold trade. Who is the person buying for Bt9,650 and why dosn't he shop where the person who is buying for Bt9,550?

<{POST_SNAPBACK}>

The shop buys for 9,550 and sells for 9,650 (plus work) to the customer. If you are a merchant you buy for a lower price than you sell. I'm not sure I understand what you do not understand.

[Kido]

This is my dad gold bar and I am looking to sell it if the price is good!

[opothai]

Government clamps down on gold traders

Deputy Commerce Minister Preecha Laohapongchana said he had ordered gold shops not to stock up on gold imports as this may affect the country’s trade deficit – as it did earlier this year. If the Commerce Ministry notices any operators increasing the volume of their gold imports “remarkably”, it will order them to report every item in their gold stock, he said.

Earlier this year, Thailand faced a high trade deficit as traders imported gold in anticipation of prices continuing to rise on the world market.

--The Nation 2005-11-29

<{POST_SNAPBACK}>

how can they crack down, the gold traders have bought the gold and taken a chance [gold can go up as well as down] so fair play to the gold merchants.

i wonder if toxin and his boys have been building up the country's gold reserve's over the past year or two

[Maestro]

This is my dad gold bar and I am looking to sell it if the price is good!

Define “good”!

If today’s price (published daily in the papers) does not match your definition, simply wait until the price gets there. It will, eventually.

[Jai Dee]

GLOBAL MARKET: Gold price continues to soar

Demand, speculators push the precious metal past the $500 per ounce level. The local price of gold for jewellery and ornaments hit a new high yesterday at Bt10,000 per 15.16 grams, driven by speculation and increased demand in the global market.

Jitti Tangsithpakdi, president the Gold Traders Association, said the recent volatility had been created by speculation, although fundamentally the price of gold will continue to rise anyway.

“The global gold price broke through US$500 [bt20,620] per ounce on Monday, but in less than a day the price dropped back below the critical $500 mark. I think it’s short-term profit taking. If the price rebounds to over $500 again this year, that will send a strong signal. I personally believe that the price will drop slightly in the next few days,” said Jitti.

He said that gold had changed its role from a commodity for personal collection to a commodity for investment. While many foreign currencies - including the US dollar, the euro and the yen - are unstable, investors are diversifying into gold, which has proved to give satisfactory returns in the past few years.

The gold price has increased continuously from Bt8,050 per 15.16 grams at the beginning of last year to Bt10,000 yesterday.

Suthas Ruangmanamongkol, Tisco Asset Management’s managing director, added that apart from the short-term speculation and the foreign-currency volatility, the gold price now was actually low compared to about 20 years ago.

“Back then the price per ounce was $800, and that was when the exchange rate was Bt25 per dollar,” said Suthas.

“Gold supply is currently less than demand. Many central banks have sold their gold to help balance the market. Fundamentally, the gold price can probably continue to rise. Many investors are now eyeing gold as another investment alternative.”

Suchada Kirakul, senior director of the Bank of Thailand’s Monetary Policy Group, commented that since October the amount of gold imported had reached a high level. The imports help protect against inflation and support the jewellery export business.

“The import of gold would affect the country’s current account deficit, however, the Bank of Thailand is keeping a close eye on it,” said Suchada.

Jitti suggested that to help gold businesses in Thailand run efficiently and be less affected by price rises or falls, the government should help the private sector set up a central organisation to facilitate information and techno-logy.

“Italy has exported about 700 tonnes of ornament gold. Each tonne is worth about Bt600 million. If we push for the import of gold, we can take about 5 to 10 per cent of Italy’s market share,” said Jitti.

He added that the government was aware of the situation and further discussions would be held soon.

Source: The Nation - December 01, 2005

[Jai Dee]

PEOPLE ARE TOLD NOT TO OVER PANIC OVER GOLD PRICES

President of the Gold Trader Association Jitti Tangsitpakdi (จิตติ ตั้งสิทธิ์ภักดี) has asked the people not to over panic about rising gold prices, suggesting that the people save money instead of investing in gold, which is highly risky.

Mr. Jitti said that the price of gold bar currently stands at 9,700 baht while manufactured gold is sold at around 10,000 baht. He said that the rising gold prices result from rising global demand and unstable economic situation. He explained that investors believe that it is safer to invest in gold, because the prices of gold have increased continuously during the past few years. However, he suggested that the people not over panic over the rising gold prices and instead save their money for their long-term saving plan.

Mr. Jitti predicts that if the price of gold escalates to 500 US dollar per ounce, next year the price may increase to 525 US dollar per ounce. He said that Thailand has reduced its imports of gold and the people who bought gold at the beginning of the year have sold it back.

The price of gold stands at 9,750 baht yesterday, the highest in Thailand’s history.

Source: Thai National News Bureau Public Relations Department - 02 December 2005

[WhiteShiva]

With all the governments around the world sitting on large national reserves of gold, and more often than not looking to liquidate these assets (without casing a crash), the price of gold is currently artificially high and as such is not a good long-term investment.

Try to explain that to your tirak, though.....

[Firefan]

Whiteshiva; we generally agree - and gold can certainly have it swings on the way, but I expect the bull market for gold to continue as governments keep de-basing their fiat currencies in order to "get money for nothing" for various spending.

I also doubt that the worlds banks sit on very much physical gold these days. It might be in some of the vaults but most of it has already been sold on forward contracts.

Back to the thread; gold is going up WORLDWIDE so do some silly gov people really think they can make the gold price go the OTHER way?

Amazing Thailand... oh; they COULD ofcourse subsidize the local price - that worked SOOO well with diesel/gasoline!

Cheers!

[WhiteShiva]

Back to the thread; gold is going up WORLDWIDE so do some silly gov people really think they can make the gold price go the OTHER way?

Amazing Thailand... oh; they COULD ofcourse subsidize the local price - that worked SOOO well with diesel/gasoline!

<{POST_SNAPBACK}>

Well I am sure it would win a few votes

Hang on - TIT - stranger things have happened......

Edited December 2, 2005 by WhiteShiva

[Firefan]

He,he - I would be the first to line up if gold was 10% cheaper here than anywhere else in the world! Cheers!

[johna]

The shop my wife deals with for her personel gold is buying for 9100 and selling for 10200 as of yesteday, this is personel jewelry that she changes from time to time.