Gold Online Trading

[prighas]

I was wondering if anyone has experienced gold online trading. I have been looking into this for some time and would like any advice before I move forward. Any insights? Any particular market? I have been looking at BullionVault and I wonder whether anyone has traded using their service.

Thanks in advance for your suggestions.

[junkofdavid2]

I was wondering if anyone has experienced gold online trading. I have been looking into this for some time and would like any advice before I move forward. Any insights? Any particular market? I have been looking at BullionVault and I wonder whether anyone has traded using their service.

Thanks in advance for your suggestions.

I wanted to play gold myself.

However, I found that a much more liquid alternative which also has a much smaller spread is to play either the Australian Dollar or the Swiss Franc, both played against the USD. (Currency pairs are called AUD/USD or CHF/USD)

The price swings of these two currencies are directly correlated to the price of gold. When gold goes up, the AUD also swings up vs. the USD. When gold goes down, the opposite happens.

The same with the Swiss Franc (symbol CHF).

(The AUD is affected by gold because of so much gold resources in Australia. The CHF is affected by gold because the currency is backed by gold reserves; meaning every single swiss franc represents a certain amount of gold in the Swiss central bank. Likewise, if you wanted to play oil, you could play the Canadian Dollar CAD which is directly correlated to the price of Oil because of the abundance of oil in Canada.)

Moreover, the Forex trading houses allow leverage, thereby allowing you to adjust your risk tolerance to a level which you're comfortable with.

Even if you are in Thailand or anywhere in the world, it's actually very easy to open an account with a Forex trading house based in the U.S.

The most reputable one now, I would say, is FXCM (which advertises on Bloomberg). You can open an account with only 1000 USD. Their website is www.FXCM.com

Take note however, that unlike U.S. stock brokerage firms, Forex trading houses are not insured by the U.S. government. You should exercise good judgement in choosing your Forex trading house.

Hope this helps.

*Disclaimer: I exclude any or all liability for any errors or misinformation contained herein due to negligence or any other cause.

[Naam]

The CHF is affected by gold because the currency is backed by gold reserves; meaning

Although Switzerland continues to retain its status as the safe haven destination for the world's capital in times of geopolitical stress, the country's currency is no longer strongly correlated with that other great safe haven asset - gold. At one time, the currency was 40% backed by the metal, but in 2005 the Swiss government sold the nation's vast inventory of gold and returned the funds to the country's cantons. As a result, the Swissie did not benefit from Gold's spectacular rise above the $700 level in May. Furthermore, given the decoupling that began in 2005, further gains in gold may not produce any additional strength in the Swissie, as the currency will most likely trade strictly off its economic fundamentals.

[junkofdavid2]

The CHF is affected by gold because the currency is backed by gold reserves; meaning

Although Switzerland continues to retain its status as the safe haven destination for the world's capital in times of geopolitical stress, the country's currency is no longer strongly correlated with that other great safe haven asset - gold. At one time, the currency was 40% backed by the metal, but in 2005 the Swiss government sold the nation's vast inventory of gold and returned the funds to the country's cantons. As a result, the Swissie did not benefit from Gold's spectacular rise above the $700 level in May. Furthermore, given the decoupling that began in 2005, further gains in gold may not produce any additional strength in the Swissie, as the currency will most likely trade strictly off its economic fundamentals.

Interesting...

Thanks for the update.

Anyway, I've been playing the Euro (EUR/USD) for the past 2 years so I haven't kept up to date on the Swiss franc.

Cheers.

Edited December 29, 2006 by junkofdavid2

[prighas]

Thanks for the responses. I'm beginning to learn more about this.

I was also wondering about why there seems to be some value discrepancies between a KG of gold that is sold in international vaults and those sold in the Thai market. The Thai market seems to be cheaper.

Any ideas?

[LivinLOS]

If your talking pure investment grade bars then I strongly doubt it..

As for 'playing' the price of gold.. You could very easily open a spread bettering account and make spread bets on gold.. Much like futures contracts these exhibit leverage on the bet and so magnify your wins and losses. I have used easy2spreadbet for exactly this.

Mostly I just take perth certs for bullion hoarding.

[prighas]

If your talking pure investment grade bars then I strongly doubt it..

Ok. I may still be a novice at this but I did some simple computation and here's what I have so far. The current price of 1 ounce (troy/apoth) of Gold is approximately 635 USD (www.thebulliondesk.com) (Dec 29, 2006). 1 ounce (troy/apoth) is equivalent to 31.103 gr.

Currently in the Thai market, 1 baht (15.2 gr) bullions are sold at 10,850 baht, which is equivalent to 298.5 USD using local current exchange rates (1 USD = 36.36B). This means that I can buy 31.103 gr (1 ounce) at 610.6 USD. This is about 24 USDs cheaper than other market prices.

I may be missing something here and therefore please advise if I have erred anywhere in my post.

[Naam]

"If your talking pure investment grade bars then I strongly doubt it."

******

livinlos is correct prighas. by the way, playing (in/out) the gold market online might be interesting but also quite risky. you'd have to watch your screen 23½ hours a day and that amounts to hard work.

http://www.kitco.com/charts/livegold.html

[importford]

Is it possible that 1 bath of gold in Thailand is not the same quality of gold??

19 karat???

just thinking??

[prighas]

Is it possible that 1 bath of gold in Thailand is not the same quality of gold??

19 karat???

just thinking??

Usually, 96.5 % is printed on bullions purchased in China town. The following is a table that shows karats and corresponding purity:

KARAT AND PERCENTAGE

1 karat equals 4.167

6 karat equals 25.000

8 karat equals 33.333

12 karat equals 50.000

14 karat equals 58.333

18 karat equals 75.000

22 karat equals 91.671

24 karat equals 100.000

Therefore, 96.5 percent could be anywhere between 22 and 24 Karats. This could be the reason for the value difference. Normally Thai retails shops claim 96.5% to be 24 karats.

[emwobberlydee]

Is it possible that 1 bath of gold in Thailand is not the same quality of gold??

19 karat???

just thinking??

Usually, 96.5 % is printed on bullions purchased in China town. The following is a table that shows karats and corresponding purity:

KARAT AND PERCENTAGE

1 karat equals 4.167

6 karat equals 25.000

8 karat equals 33.333

12 karat equals 50.000

14 karat equals 58.333

18 karat equals 75.000

22 karat equals 91.671

24 karat equals 100.000

Therefore, 96.5 percent could be anywhere between 22 and 24 Karats. This could be the reason for the value difference. Normally Thai retails shops claim 96.5% to be 24 karats.

Thai gold is 23 carat / 96.5% purity as you say which accounts for the difference in price of US$635 / troy ounce and US$ 612 / troy ounce of Thai gold. Most of the gold shops also sell 99.9999% purity in the form of small bars and 'Chinese cups' (for wont of a better phrase) in baht weight or troy ounces. Buying the gold in this form negates the need to pay for "workmanship" which is a fee levied per baht weight on gold jewelry. It is further advisable to buy your gold jewelry either in China Town or on the corner of Sukhumvit Soi 10 (a branch of a Chinatown dealer.) The reason for this is their gold is allegedly a better quality and ensures that you receive the top selling price when you want to offload for cash or upgrade an item.

Obviously the gold bars are the way to go for investment, however, hoarding gold in the physical form brings with it its own set of problems, theft / safety deposit box fees etc.

There are now precious metal ETFs these days 'GLD' in the US which can be traded like any stock on the market, no need to store anything yourself. You can also have a bank account in gold grams (Kitco). I seem to recall that the exchange rate fees are quite high, I could be wrong on this.

[cclub75]

Is it possible that 1 bath of gold in Thailand is not the same quality of gold??

19 karat???

Nope. Gold in Thailand is 96.5 % (see the message of prighas for conversion in carat).

To prighas : your calculation is theoritically correct.

But... but... There are some problems :

-it's more difficult to find "bullion" of 1 Bath. All the gold shops will try to sell you coins or other pieces of ornaments. In this case, you pay a premium. And it's quite fair : they make their margin on the work premium.

However, for "bars" it's OK.

-volatility : gold prices are very volatile. The price in thailand is fixed 1 time per day. But with time lag.

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

-exchange rate : again, it's unlikely you can get the fixing "inter banks" (more likely much less if you change USD bills).

Unless you want to buy huge quantity.... i would advise you to pay little attention to the price evolution, on a day to day basis. 100 or 200 THB difference it's not a big deal.

If you believe in gold as an "investment" (for security, inflation hegde etc.), then you should believe that price of gold will go up. So at 620 or 635 USD/ounce, does'nt make any difference : you will win on the long term.

[Naam]

Normally Thai retails shops claim 96.5% to be 24 karats

*****

24 carat finegold is 999.9

[LivinLOS]

If your talking pure investment grade bars then I strongly doubt it..

Ok. I may still be a novice at this but I did some simple computation and here's what I have so far. The current price of 1 ounce (troy/apoth) of Gold is approximately 635 USD (www.thebulliondesk.com) (Dec 29, 2006). 1 ounce (troy/apoth) is equivalent to 31.103 gr.

Currently in the Thai market, 1 baht (15.2 gr) bullions are sold at 10,850 baht, which is equivalent to 298.5 USD using local current exchange rates (1 USD = 36.36B). This means that I can buy 31.103 gr (1 ounce) at 610.6 USD. This is about 24 USDs cheaper than other market prices.

I may be missing something here and therefore please advise if I have erred anywhere in my post.

As everyone has already pointed out, the flaw in your logic is that you looking at jewelery gold at 23k rather than pure / fine gold at 24k.

Being a suspicious person I would be very wary of gold bars in Thailand.. I simply cannot do any tests to determine the quality.

[suk22fool]

If you set up a bank account with them, you can use a Swiss Bank (such as UBS) to buy and sell with just a phone call. Very easy and trades are at Spot Rate. Holding fees are something like 0.5%pa.

I also bought a few 10baht bars last year from shops in BKK. Never had anybody try to tell me 96.5% was 24k. I got to know a few gold traders over the past few years. Even though I was not buying from them, they advised me 96.5% was a better buy in BKK because it was the trade standard for use in Thai jewelry...so easier to sell quickly. Always buy from a larger shop that has their stamp on the bar.

[Orangutan]

I buy 5 baht and 10 baht gold bars (99.99%) in China Town. The shop is located on the one-way main road, the road that goes through the market on both sides. The name of the shop is 24 karat, look for the huge 24 sign above the shop. This is the only place I know of in Bangkok.

-Orangutan

[prighas]

I buy 5 baht and 10 baht gold bars (99.99%) in China Town. The shop is located on the one-way main road, the road that goes through the market on both sides. The name of the shop is 24 karat, look for the huge 24 sign above the shop. This is the only place I know of in Bangkok.

-Orangutan

Thanks for that. Are the gold bars from 24K shop labeled 99.99%?

[Orangutan]

I buy 5 baht and 10 baht gold bars (99.99%) in China Town. The shop is located on the one-way main road, the road that goes through the market on both sides. The name of the shop is 24 karat, look for the huge 24 sign above the shop. This is the only place I know of in Bangkok.

-Orangutan

Thanks for that. Are the gold bars from 24K shop labeled 99.99%?

Yes.

[girlx]

curious, what do you do with your gold bars, hide them under your mattress?

[roderick17]

Under the mattress ! it certainly is a very secure location, but it makes it terribly hard to get a good night's sleep.

Anyway, what is the prediction for the US and AUD currencies . How low can the USD go ??

[Orangutan]

curious, what do you do with your gold bars, hide them under your mattress?

No I put them in a cloth bag and taped it to the back of one my drawers.

-Orangutan

[girlx]

...and where do you live??!?

[JimsKnight]

...and where do you live??!?

Well said LOL

But seriously I've been told think the reason for the 96.5 % thing is because if you had 100% pure gold the lack of minor impurities would leave the gold vunerable too fragile / erodable? A buddy explained that having something like 'ultra' pure would mean it would disintergrate over time. If it is slightly less pure the impurities actually strengthen the golds overall (Atomic) structure etc.

I believe all over the world its same. Or am I shooting wide of the mark here?

Is there gold trading you can do where the gold just 'sits' and hangs out. You own the stuff but you don't have to worry about storing the stuff anywhere.

Or is it 'Buy this and it gets delivered to your doorstep deal??'

Taped to the drawer style... hmmm might try that.

A buddy in LA actually has a huge floor safe with everything chucked in it!

Wonder if you can get these in Thailand....

[prighas]

But seriously I've been told think the reason for the 96.5 % thing is because if you had 100% pure gold the lack of minor impurities would leave the gold vunerable too fragile / erodable? A buddy explained that having something like 'ultra' pure would mean it would disintergrate over time. If it is slightly less pure the impurities actually strengthen the golds overall (Atomic) structure etc.

I believe all over the world its same. Or am I shooting wide of the mark here?

I was told the same thing. However, some of the previous posters were able to purchase 99.99% Gold bars.

Is there gold trading you can do where the gold just 'sits' and hangs out. You own the stuff but you don't have to worry about storing the stuff anywhere.

Or is it 'Buy this and it gets delivered to your doorstep deal??'

Taped to the drawer style... hmmm might try that.

A buddy in LA actually has a huge floor safe with everything chucked in it!

Wonder if you can get these in Thailand....

The initial place I was referring to in my original post is BullionVault (www.bullionvault.com). It is an online trading market where gold is stored in a vault of your choice: New York, London, or Zurich.

Edited January 5, 2007 by prighas

[ytivarg]

To do speculative investment in physical bullion in the form of swiss bars in bangkok please check out the ylg gold shop. http://www.ylgbullion.com/