Gold Price Rising Up And Highly Intelligent Mathematicians At Gold Shops...

[manxninja]

Thanks for the insight from posters into the gold issue. My take was that a baht was roughly value at 400 pounds, so offering 300 per baht quite reasonable. As a ticket to Thailand is a lot more.

I must admit it is the only gold I have heard of that does not depreciate on second hand value, regardless of the weight.

It's worth what someone is willing to pay I guess. Interesting though.

[starky]

That's why Thai people love it so much but it is pretty much the same all throughout Asia. Certainly in Vietnam, Cambodia and Laos.

[tropo]

I do not know anything about gold but I do know percentages are not commonly understood in Thailand. Some years ago my wife's brother refused to drive a tractor for us paying 300 baht a day but was happy to work for 20% of the total days profit resulting in him earning around 280 baht a day. The university educated nice of my wife could not tell me what 10% of 100 is, I believe it is something they are not taught possibly why the banks and lone sharks are happy and the farmers are in big trouble.

I had my wife with me and she didn't really get it. When I was asking the employee what 10 % of 20,000 would be, she couldn't answer me.

Nor could the other employees.

I never thought about your point how easy it is for loan sharks to have a signed contract stating a 45 % interest per month/year.

Thanks a lot for pointing that out.

I can solve your mystery. The 30% you were offered was on the manufacture cost of the jewelry piece, not the gold in it. You'll never get a discount on the gold.

Most honest shops will sell 23K (96.5%) gold jewelry for a manufacturing cost per baht, but some shops, especially ones frequented by many foreigners, will sell it for a manufacturing cost per half-baht.

Considering your "discount" of 600 baht, they must be quoting a manufacturing cost of 1000 baht per half-baht of gold, totaling 2000 baht, yielding you an imaginary 600 baht discount at 30%. Most per-baht manufacturing costs run between about 700 baht to well over 1000 baht. It varies depending on the intricacy of the piece and colours used. I too have had to pay this (per half-baht manufacture cost) as one gold shop that had this pricing policy had a piece my wife really wanted. That's was about 1500 baht with no discount.

The shop assistant was probably better at maths than you thought, he just didn't make it clear what he was discounting.

Most Thai staff will call this charge the "making cost".

Another important consideration is how much a gold shop will buy back the gold for. The maximum commission is usually 5%, but some shops charge considerably less. The buy back price is the bottom number of the 3 you'll see posted at most shops. This is what they will pay for buying back their own pieces, which they would have stamped for identification when you purchased it. Shops which charge low commission to buy back their own pieces usually give a very bad price to buy back pieces from other shops. This is to ensure loyalty.

My regular shop will pay the same to buy back gold pieces from any other shop, but they will test it (involves scraping), so don't offer a piece for sale unless you're sure you're going to sell it. They usually hit it with a blow torch too, to get rid of any residue (dirt) which is making it heavier.

[lostinisaan]

I do not know anything about gold but I do know percentages are not commonly understood in Thailand. Some years ago my wife's brother refused to drive a tractor for us paying 300 baht a day but was happy to work for 20% of the total days profit resulting in him earning around 280 baht a day. The university educated nice of my wife could not tell me what 10% of 100 is, I believe it is something they are not taught possibly why the banks and lone sharks are happy and the farmers are in big trouble.

I had my wife with me and she didn't really get it. When I was asking the employee what 10 % of 20,000 would be, she couldn't answer me.

Nor could the other employees.

I never thought about your point how easy it is for loan sharks to have a signed contract stating a 45 % interest per month/year.

Thanks a lot for pointing that out.

I can solve your mystery. The 30% you were offered was on the manufacture cost of the jewelry piece, not the gold in it. You'll never get a discount on the gold.

Most honest shops will sell 23K (96.5%) gold jewelry for a manufacturing cost per baht, but some shops, especially ones frequented by many foreigners, will sell it for a manufacturing cost per half-baht.

Considering your "discount" of 600 baht, they must be quoting a manufacturing cost of 1000 baht per half-baht of gold, totaling 2000 baht, yielding you an imaginary 600 baht discount at 30%. Most per-baht manufacturing costs run between about 700 baht to well over 1000 baht. It varies depending on the intricacy of the piece and colours used. I too have had to pay this (per half-baht manufacture cost) as one gold shop that had this pricing policy had a piece my wife really wanted. That's was about 1500 baht with no discount.

The shop assistant was probably better at maths than you thought, he just didn't make it clear what he was discounting.

Most Thai staff will call this charge the "making cost".

Another important consideration is how much a gold shop will buy back the gold for. The maximum commission is usually 5%, but some shops charge considerably less. The buy back price is the bottom number of the 3 you'll see posted at most shops. This is what they will pay for buying back their own pieces, which they would have stamped for identification when you purchased it. Shops which charge low commission to buy back their own pieces usually give a very bad price to buy back pieces from other shops. This is to ensure loyalty.

My regular shop will pay the same to buy back gold pieces from any other shop, but they will test it (involves scraping), so don't offer a piece for sale unless you're sure you're going to sell it. They usually hit it with a blow torch too, to get rid of any residue (dirt) which is making it heavier.

Thanks a lot for your great post. Explains a lot.....