Nosediving Gold Prices Batter Thai Pawnshops

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Nosediving gold prices batter Thai pawnshops
By Digital Media



BANGKOK, April 20 – The plunge in gold prices has wreaked havoc on Thai pawnshops where 80 percent of received assets are the precious metal, according to the Bangkok Metropolitan Administration (BMA).

The BMA runs about 20 pawnshops in the capital, with others privately operated. Gold is the most common asset for pawnshops.

Heads of BMA-owned pawnshops held an urgent meeting to discuss measures to cope with the declining gold prices.

Pantawan Kingthongkam, chief of the BMA pawnshop in Pradipat area, said the value of unclaimed assets remained normal but it should be clearer at the end of this month whether more people will leave their pawned assets unclaimed.

Pawnshops normally pledge gold at 85 per cent of the market price but the unfavourable sentiment has forced them to adjust it downward to 70-75 per cent.

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest – a rate she described as reasonable.

State-owned and private pawnshops have been unusually quiet in the last few days when the business is traditionally busy at this time of the year as parents need money for their children for the approaching new school term.

Most private pawnshops have pledged gold at Bt13,000-15,000 per baht weight in the last few days. Gold prices on the Thai bullion market adjusted 12 times on Friday to finally close at Bt19,250 per baht weight. (MCOT online news)


-- TNA 2013-04-20

[Suradit69]

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest ...

1% per what? week? month?

[bri1guy]

IM sure allot less people pawning gold but allot more people are buying gold too, thats forsure/.. The pawn shops make there money!!

[ARGUSEYE]

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest ...

1% per what? week? month?

MCOT can't afford a proof reader with more than a few working brain cells

[David48]

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest ...

1% per what? week? month?

For some different reason, Thai's often post the Monthly interest rate.

So, in absolute terms ... 1% equates to an annual 12% interest rate charge.

.

[Phil Conners]

I think I will let this image speak for itself...

[Briandajew]

I think I will let this image speak for itself...

I bet they are hoping that Jim Sinclair's prediction of USD 50,000 an ounce is just around the corner!

http://silverdoctors.com/jim-sinclair-us-will-be-cyprussd-gold-headed-to-50000oz-heres-why/

[Naam]

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest ...

1% per what? week? month?

For some different reason, Thai's often post the Monthly interest rate.

So, in absolute terms ... 1% equates to an annual 12% interest rate charge.

.

1% interest per month results in a higher than 12% rate p.a.

[Briandajew]

I had a gold necklace from Thailand that I wanted to sell - it weighed about 10 Baht - I bought it when Gold was about 5000 Baht/Baht, so I got the Mrs. to take it into the shop we bought it from 8 years earlier. (Gold was now at 13,000 Baht) When she came out of the shop, she said the guy in the shop offered her 9000 Baht/Baht as the Gold was a bit old!!!

I went in and asked what he meant, he said it looked quite a few years old and wasn't that "New" looking.

He didn't smile when I told him I knew it was old and that it was probably nearer 200 Million years after the earth was formed, somewhere in the region of 4 billion years, as opposed to "A few years" unbelievable how they will try to con people.

Edited April 21, 2013 by Briandajew

[Briandajew]

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest ...

1% per what? week? month?

For some different reason, Thai's often post the Monthly interest rate.

So, in absolute terms ... 1% equates to an annual 12% interest rate charge.

.

1% interest per month results in a higher than 12% rate p.a.

Only if it is "Compound" - It is a bit of a scam, AER/Gross / Net, compound......some interest is compounded, but only after tax is deducted, it is all weighted against you!

Percent is a terrible term, it can lead to massive headaches and gross miscalculation if not properly understood -

https://en.wikipedia.org/wiki/Percentage

Edited April 21, 2013 by Briandajew

[BookMan]

This is what surprised me form the article

The BMA runs about 20 pawnshops in the capital,

Any reason why they run pawn shops?

[Briandajew]

One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 per cent interest ...

1% per what? week? month?

For some different reason, Thai's often post the Monthly interest rate.

So, in absolute terms ... 1% equates to an annual 12% interest rate charge.

.

It seems to be the case where I am in the way they work this out. Usually around here if locals borrow say 10,000 Baht they calculate interest usually at 10% per month, but this is a flat rate on the initial sum borrowed.

So for example, if Somchai borrows 10000 Baht he needs to pay back 1000 baht per month in interest, this continues as long as the original 10,000 is outstanding, so if he doesn't clear his loan for 3 years he will have to repay 36 payments of 1000 Baht, plus the final payment of the original loan - 36,000 + 10,000 = 46 000 (Horrible loan sharking when you look at it - I cannot understand why these country people don't even try to go to the bank)

My maths are not that fantastic these days, but Naam, if you are looking, is this something like 153%? (AER)

Edited April 21, 2013 by Briandajew

[Naam]

My maths are not that fantastic these days, but Naam, if you are looking, is this something like 153%? (AER)

it is

[jbrain]

Heads of BMA-owned pawnshops held an urgent meeting to discuss measures to cope with the declining gold prices.

Maybe the government can start a gold pledging scam scheme, it seem they are quite succesful with the rice version of it

[HarryMilton]

This is what surprised me form the article

The BMA runs about 20 pawnshops in the capital,

Any reason why they run pawn shops?

To help citizens who need help without getting ripped off.

[HarryMilton]

My maths are not that fantastic these days, but Naam, if you are looking, is this something like 153%? (AER)

it is

No it's not, it's 360%, 36,000 on 10,000.

[darhut]

My maths are not that fantastic these days, but Naam, if you are looking, is this something like 153%? (AER)

it is

No it's not, it's 360%, 36,000 on 10,000.

AER Harry (Annual Equivalent Rate) . Can also have EAR (Equivalent Annual Rate) APR Annual Percentage Rate. My calculations are 120% per annum flat over a 3 year term, Or 10% a month flat rate .

[Naam]

My maths are not that fantastic these days, but Naam, if you are looking, is this something like 153%? (AER)

it is

No it's not, it's 360%, 36,000 on 10,000.

are you trying to tell me it is not ?

[Naam]

My maths are not that fantastic these days, but Naam, if you are looking, is this something like 153%? (AER)

it is

No it's not, it's 360%, 36,000 on 10,000.

AER Harry (Annual Equivalent Rate) . Can also have EAR (Equivalent Annual Rate) APR Annual Percentage Rate. My calculations are 120% per annum flat over a 3 year term, Or 10% a month flat rate .

the calculation of various percentages can be quite tricky and is impossible without knowing the agreed as well as the actual cash-flow of interest and/or redemption.

plain wrong is HarryMilton's shot from the hip "it's 360%"

[Joe Mamma]

Bling bling- ka-ching!

[Naam]

Bling bling- ka-ching!

dingeling dong!