Thailand: As gold price falls to a 34-month low, metal glitters for small savers

[webfact]

New gold rush
The Nation, Bloomberg


A woman selects necklaces at a gold shop in Chinatown yesterday. People flocked to buy gold after the price dropped to below Bt18,000 per baht weight (about 15 grams)

As price falls to a 34-month low, metal glitters for small savers

BANGKOK: -- Savers nationwide are flocking to gold shops, enticed by the falling price of the precious metal, which yesterday tumbled to a 34-month low amid fears of an end to the US quantitative easing policy.

Gold bar fell below Bt18,000 per baht weight for the first time since April 2010.

Wisawa Wisawachaiwat, the owner of Jongluck Gold Shop in Phitsanulok, said the recent plunge had sparked new interest among small savers. "The prices have fallen to the lowest in years and they are expecting huge profits once the prices climb up again," he said. Some clients took home gold bars worth 50-100 in baht weight.

The precious metal yesterday extended the decline to a 34-month low amid speculation that the US Federal Reserve will reduce stimulus with economic data beating estimates. Held as a safe bet against inflation, gold lost value as unprecedented money printing by central banks around the world failed to spur inflation.

A lack of accelerating inflation and concerns about the strength of the global economy is also hurting silver, platinum and palladium, which are used more in industry.

Bullion has slid 28 per cent this year, set for the biggest annual drop since 1981, after rallying for the past 12 years. About US$62.4 billion was wiped off the value of precious metals exchange-traded product holdings this year as some investors lost faith in them as a store of value.

While gold bullion slid to $1,180.50 an ounce early yesterday in Singapore, the lowest since August 2010, gold prices in Thailand followed the move. Local gold prices were adjusted 15 times yesterday in line with global volatility. At 5pm, gold bar was sold at Bt17,850 while ornaments were at Bt18,250 per baht weight.

Local gold price averaged Bt17,493.18 in April, 2010, when global prices averaged $1,145.72 per ounce and when the baht was at 32.29 to the US dollar.

Jitti Tangsitpakdi, president of Gold Traders' Association of Thailand, believed that gold prices could decline further but would not fall below $1,100 per ounce. Cheap prices should spur new demand and the local prices could be cheaper if the baht does not weaken further against the US dollar.

Christin Tuxen, a senior analyst at Danske Bank in Copenhagen, who sees gold at $1,000 in three months, said: "The current environment is a fundamentally poisonous one for the yellow metal. Rising yields are upping the opportunity cost of holding gold, the initiation of a fundamental dollar up-trend weighs, inflation expectations are in decline as the commodities super-cycle wears off, and many tail risks have been sidelined."

Investors sold 583.2 tonnes of gold this year.

"There're still people who are interested in gold but because prices have fallen so much and so rapidly, they'll wait for some stabilisation," said Alexandra Knight, an economist at National Australia Bank. "There's definitely been a loss of confidence in gold and that's seen in the ETF liquidations."


-- The Nation 2013-06-29

[ChrisY1]

There's also a lot of people who went crazy a few weeks ago buying when the price dropped.......!

Big loans taken and now worth a lot less....take it easy and wait....there's no guarantee of prices rising..!!

[CIHUAHUA]

Don't be fooled with a "dead-cat-bounce" in gold prices. It may go up a little but people that invested in it as a hedge are beginning to pull out.

[shaurene]

There's also a lot of people who went crazy a few weeks ago buying when the price dropped.......!

Big loans taken and now worth a lot less....take it easy and wait....there's no guarantee of prices rising..!!

Gold. You will see gold by the year end just below US$1,000 and next year do not be surprised to see it drop to around $750-$800 be a long time before it takes off again, so hold off.

[shaurene]

All the so called experts expect gold to drop to $1000 by end of the year and a good chance it will be as low as $750-$800 some time in 2014, hold off be a long time before it takes off again. Soros and Hathaway guy have sold a lot.

[watcharacters]

Not long ago a friend of mine who's been investing in gold coins for the last 3+ years said the recent decline is nothing but a glorious chance to buy more gold.

He once said gold is a bargain at any price even if it reaches over 10K Aussie an oz.

He sure has a wonderful opportunity at this time.

[lucjoker]

forget gold ,buy land

1 rai bought 7 y ago for 800 000 bht

today sold for 3.5 mill bht

This is what thais are doing now .

[GentlemanJim]

All the so called experts expect gold to drop to $1000 by end of the year and a good chance it will be as low as $750-$800 some time in 2014, hold off be a long time before it takes off again. Soros and Hathaway guy have sold a lot.

These are the same experts that said this time last year "by the end of the year Gold will be over $ 3000 an ounce" !

[kiniyow]

Just wait until the Next Nuclear War rumors start up again...Fear that all the borrowing will have it's damage..Never think the Govt is out of the woods...Spain-Italy--Portugal Etc is not far away from being another Greece...Then see what you rather be holding? Paper or Gold?

[GentlemanJim]

Just wait until the Next Nuclear War rumors start up again...Fear that all the borrowing will have it's damage..Never think the Govt is out of the woods...Spain-Italy--Portugal Etc is not far away from being another Greece...Then see what you rather be holding? Paper or Gold?

i'd prefer 3 tonnes of rice, 1000 cans of fish , access to underground water and 100 acres of private land ...and no, you couldn't have it for 10 kilo's of Gold.

[AnotherOneAmerican]

Just wait until the Next Nuclear War rumors start up again...Fear that all the borrowing will have it's damage..Never think the Govt is out of the woods...Spain-Italy--Portugal Etc is not far away from being another Greece...Then see what you rather be holding? Paper or Gold?

i'd prefer 3 tonnes of rice, 1000 cans of fish , access to underground water and 100 acres of private land ...and no, you couldn't have it for 10 kilo's of Gold.

My 200x .38 hollow points plus a Saturday night special Vs your food and land.

Edited June 29, 2013 by AnotherOneAmerican

[harryfrompattaya]

All the so called experts expect gold to drop to $1000 by end of the year and a good chance it will be as low as $750-$800 some time in 2014, hold off be a long time before it takes off again. Soros and Hathaway guy have sold a lot.

This for sure gold will 850 within a year. I am glad others know about Soros

Edited June 29, 2013 by harryfrompattaya

[EyesWideOpen]

This is a funny story. Gold is falling like a stone, yet Thai people are rushing in to buy. I guess this is the golden version of the old Wall Street maxim, never try to catch a falling knife.....

[GentlemanJim]

Just wait until the Next Nuclear War rumors start up again...Fear that all the borrowing will have it's damage..Never think the Govt is out of the woods...Spain-Italy--Portugal Etc is not far away from being another Greece...Then see what you rather be holding? Paper or Gold?

i'd prefer 3 tonnes of rice, 1000 cans of fish , access to underground water and 100 acres of private land ...and no, you couldn't have it for 10 kilo's of Gold.

My 200x .38 hollow points plus a Saturday night special Vs your food and land.

Oooh I've got 201, so unless you can put some salt and pepper on your hollow points and eat them I'll stick with the food and land.

[thrilled]

What goes up must come down.You can also believe this.Once it hits bottom it'll start going up again.Buy some on the way down.Keep on buying it as it hits bottom.All people that like gold buy what ya can afford.The rest of us will watch ya get wealthy again just like in the 70's.

[NeverSure]

This is a funny story. Gold is falling like a stone, yet Thai people are rushing in to buy. I guess this is the golden version of the old Wall Street maxim, never try to catch a falling knife.....

I agree. I will say just this one thing. If gold is something one holds in his portfolio forever with no plans to ever sell, and doesn't hold too much, (and silver too) then it might not hurt to dollar cost average on the way down, buying just a little at a time.

I have USA silver coins - what they call junk silver, or pre-1965 coins - that I bought it the 60's at par. I have $1,000 bags of them that cost me $1,000. With inflation, they may not have actually gone up in value at all. But I will still buy a bit of it here and there and then they can bury it with me.

But I would never play the market trying to make a profit. That is a fool's game as the metals are manipulated and we aren't in on the know about it.

Gold and silver are a way to store what "might" be "wealth" if certain things should happen, but I have no idea what could happen. I just like to have some of it in case it is every handy. But I make to predictions because I simply don't know.

[IsaanUSA]

Some clients took home gold bars worth 50-100 in baht weight.

Wow!