why does thai gold trade at a $45 dollar premium

[leosuntime]

why does thai gold trade at a $45 dollar premium over spot in thailand

[wym]

I believe your question should be:

Why does physical gold where the buyer actually takes possession of the metal currently have such a high premium over paper instruments that are only a promise the buyer must take on trust?

This phenomenon is most marked in those parts of the world where people KNOW that banksters and government aren't worthy of that trust.

China will end up having a more trustworthy currency for world trade than the USD and EUR if the post-2008 trends continue. Might take a while but inevitable.

[KhunBENQ]

Please specify what are you referring to.

If you refer to the Thai Baht prices that are seen at the gold shops: they refer to ornaments, which contain some premium for the work portion.

And as stated above: physical gold always contains a premium compared to the "spot" prices.

[speedtripler]

thai gold has a higher purity than gold from some other countries

not sure the exact figures though because i dont collect gold

thai gold is generally 23-24 karat (96.5% pure is soft )

against 18 karat which is often tougher for jewellery etc

Karat and Appearance

Thai gold jewelry often has a purity of 96,5% gold, which is equivalent to 23 karat. The remaining 3,5% consist of alloys such as silver and bronze. Some shops also provides 22, 20 or 18 karat jewelry.

Lower karat objects has become a little more common in Thailand nowadays, partly inspired by "western" or so called "farang gold". Generally speaking, the higher karat a gold object has, the softer it is. For that reason, a lower karat can be recommended for rings and thin jewelry.

The Thai gold often has an intense "yellow" color due to the high carat.

[leosuntime]

thai gold has a higher purity than gold from some other countries

not sure the exact figures though because i dont collect gold

thai gold is generally 23-24 karat (96.5% pure is soft )

against 18 karat which is often tougher for jewellery etc

Karat and Appearance

Thai gold jewelry often has a purity of 96,5% gold, which is equivalent to 23 karat. The remaining 3,5% consist of alloys such as silver and bronze. Some shops also provides 22, 20 or 18 karat jewelry.

Lower karat objects has become a little more common in Thailand nowadays, partly inspired by "western" or so called "farang gold". Generally speaking, the higher karat a gold object has, the softer it is. For that reason, a lower karat can be recommended for rings and thin jewelry.

The Thai gold often has an intense "yellow" color due to the high carat.

just the 96.5% pure bars, the seems to have a exactly a $45 dollar premium on it that never changes, like a tax

I remember reading some where that thai gold dealers must sell according to a price set by some group here

every where I go I see some one with their dirty hands in a market, im just wondering If its the same thing in the thai gold market

[jackinbkk]

Because fools are willing to pay it probably...

[wym]

Well now the discussion has lost all possibility of being productive.

By "spot price" are you talking about anything to do with the retail gold shops?

That term usually refers to the financial trading market, which of course refers in turn to the price of investment-grade bars as traded by the commodity markets and central banks, AKA .9999 fine.

This is IMO the only type of gold worth purchasing unless you're keeping strictly within Thai borders with it.

And that spread - between the international spot price and physical gold - has certainly increased since the Fed and NY bullion banks manipulated pricing last year to try to preserve the value of the USD for a bit longer, since the Chinese central banks and Asian consumers demand for the physical metal hasn't been dampened in the least, only commodity speculators are wary of the 800 lb gorilla that has the power to yank the rug out from under their short-term trading at any moment.

Now if you'are talking about the quoted price posted in retail shop windows in Thailand, that price is set by the central gold association here, and although of course it has to go up and down in the long term following the international price, that number actually refers to physical Thai gold, which as others have pointed out is not pure investment grade gold.

If you buy a chain, there is a certain "work surcharge" for the design/labor costs for the actual manufacturing of the object.

I believe there is also a (smaller) markup on Thai gold bars.

But none of that has anything to do with the usual meaning of "spot price".

So if you're actually seeking knowledge here, please do define your terms more precisely, and make sure you're comparing apples to apples.

[leosuntime]

Well now the discussion has lost all possibility of being productive.

By "spot price" are you talking about anything to do with the retail gold shops?

That term usually refers to the financial trading market, which of course refers in turn to the price of investment-grade bars as traded by the commodity markets and central banks, AKA .9999 fine.

This is IMO the only type of gold worth purchasing unless you're keeping strictly within Thai borders with it.

And that spread - between the international spot price and physical gold - has certainly increased since the Fed and NY bullion banks manipulated pricing last year to try to preserve the value of the USD for a bit longer, since the Chinese central banks and Asian consumers demand for the physical metal hasn't been dampened in the least, only commodity speculators are wary of the 800 lb gorilla that has the power to yank the rug out from under their short-term trading at any moment.

Now if you'are talking about the quoted price posted in retail shop windows in Thailand, that price is set by the central gold association here, and although of course it has to go up and down in the long term following the international price, that number actually refers to physical Thai gold, which as others have pointed out is not pure investment grade gold.

If you buy a chain, there is a certain "work surcharge" for the design/labor costs for the actual manufacturing of the object.

I believe there is also a (smaller) markup on Thai gold bars.

But none of that has anything to do with the usual meaning of "spot price".

So if you're actually seeking knowledge here, please do define your terms more precisely, and make sure you're comparing apples to apples.

its kind of disgusting when people just parrot what they read.

no you are not smart wym

and I feel sorry for the family who have yo put up with your aggressive verbal dribble

[wym]

Thanks for your concern for my family.

My point is best summarized as - given the way you posted, we can't understand your question.

We need more detail as to what you are actually referring to in order to answer you accurately.

I certainly didn't mean to put you down, sorry if the way I wrote caused you to interpret it that way.

[KhunBENQ]

A lot of baseless rubbish initiated by a thread without any reproducable sources/facts.

Typical forum mess.

I did some math on my own:

1 oz.tr. = 31.1034768 g (that the exact weight that the spot prices refer to)
1 Baht = 15.4 g (that is the weight which the Thai gold traders refer to, be aware: its not 0.5 oz exactly!)

Latest spot price: 1258 USD/oz (pure 100 % gold weight)

http://www.goldseiten.de/content/kurse/edelmetalle_gold.php

(sorry its in German, but I think you find the numbers there)

USD/THB = 32,73 (Bangkok Bank TT, as of today)

Goldprice Thailand, gold bars 1 Baht, 96,5% (buying, selling: 19650, 19750) as of today.

http://www.goldtraders.or.th/

(first row!, second row is the price for ornaments [a different thing!!!], see my post above)

Math:

19750 / 32.73 / 0.965 * 31,1034768 / 15.4 = 1262.93 USD/oz.

Where is that big premium?

My math may be wrong and surely include some uncertainties (exchange rate, date of price fixing).

But: its a complete myth that there is any relevant discount/premium on gold in any country with free gold trade.

If so: what would happen? Just invest a minute of thinking.

every where I go I see some one with their dirty hands in a market, im just wondering If its the same thing in the thai gold market

The dirty hand is called "Thai Goldtraders Association" in English (see link above).

They do the price fixing for all licensed Thai goldtraders.

Call it Chinese gold traders mafia if it makes you feel better