Gold shops suffer lack of cash as people rush to sell their jewellery

[The Word]

7 hours ago, Toany said:

You take in you gold jewellery and borrow money on it and pay 1% interest.  They work the same way as a porn shop.

?

[EVENKEEL]

5 hours ago, Vigilante said:

Not normal but when you buy (mickey-mouse) thai gold with its' arcane rules anything can happen.

What is Mickey mouse gold?

[Fatman666]

Long chaotic queues were seen outside gold shops in Bangkok’s Yaowarat area on Tuesday (April 14) 

https://www.nationthailand.com/news/30385978?utm_source=bottom_relate&utm_medium=internal_referral

[Bangkok Barry]

8 hours ago, webfact said:

most banks have nearly reached their limit on loans

Ominous.

 

8 hours ago, webfact said:

“We have suggested to more than 2,000 gold shops under our association that one measure is to go in for alternate-day opening between shops to slow down the number of people selling gold while preserving their customer base,” he added. “It is also a good way to reduce crowding at these shops to prevent Covid-19 from spreading.”

So, instead of spreading the number of customers out, they will double the number showing up on the days they're open. Exactly the opposite to what they claim they want to do. Thai logic in action again.

[Curt1591]

10 minutes ago, jimmjam said:

every gold shop here will take your gold for a loan, you have a set date for when you have to pay back and claim your gold, or you can extend for an extra amount that's added.

I don't know where "here" is. However, the gold shop I deal with sells gold at their set "sell" price, with "labor" added to jewelry, 150 baht added to 1 baht bars, 5 baht bars and up at their spot sell price. If bought from them, they will buy their gold back at their set "buy" price, no labor or other premiums returned.  Later, when you have money, you can buy more gold. But, they do not hold your gold for a later buy back.

Long ago, when first coming to Thailand, I did hit a couple smaller shops. It wasn't a good experience - heavy on the sales pitches. I now use a shop my mother-in-law has been buying from since the 60's.  

They are in the business of gold, not consumer loans. They do such a volume they don't need to hassle with all that bookkeeping! 
----------------
" ... extend for an extra amount that's added."

Typically, pawn shops, at least in civilization, will often extend the duration of the loan if interest payments are made. God only knows how it works here. 

 

[Curt1591]

 

[ivor bigun]

I remember as a young lad ,my then girlfriend bought me a half sovereign ring i seem to remember it cost her a weeks wages back in the early 60s about 8 pounds ,i havnt worn it for years ,wonder how much that must be worth?

[DrTuner]

Gold goes first, then car, then scooter, then whatever is not nailed to the ground, then somebody else's property and so on. Fortify your castles, thieves are coming.

[CGW]

25 minutes ago, ivor bigun said:

wonder how much that must be worth?

150 of your British pounds? or thereabouts?

 

[ivor bigun]

2 hours ago, CGW said:

150 of your British pounds? or thereabouts?

 

wow , still it wont get sold,it sits in my wifes jewelry box along with two other gold rings that were given to me as prezys when i was younger , only wear  my wedding ring now ,lol

[Blumpie]

3 hours ago, DrTuner said:

Gold goes first, then car, then scooter, then whatever is not nailed to the ground, then somebody else's property and so on. Fortify your castles, thieves are coming.

When I read this post that's the first thing that went through my mind too.  The safeguards afforded to first world nations simply don't exist here yet.  Thailand is, forgive me and I'm not trying to incite anger, a juvenile when it comes to problems like this and in many ways they simply lack the tools to help financially.

It's worrying.  

[Vintage]

7 hours ago, ivor bigun said:

I remember as a young lad ,my then girlfriend bought me a half sovereign ring i seem to remember it cost her a weeks wages back in the early 60s about 8 pounds ,i havnt worn it for years ,wonder how much that must be worth?

£160 for the coin plus the gold in the mount possibly 5grams adding another £75

[thaismog]

12 hours ago, wcoast said:

I bought a bunch in oct 2018 when gold went down to 18,250 baht, today I can sell it for 26,000 per baht minus 100 per bar, nice return on the investment today, but I think it will go higher.

If you sell they charge 200 per bar 

[thaismog]

 

Thai and social distancing in front of gold shops 

https://www.nationthailand.com/news/30385978

[Monomial]

We've already had to get a cash loan against our gold to keep us going.  We use Thai Credit Retail Bank as their interest rate is cheaper. Only about 10% instead of the usual 12% - 15%.  Don't know what we're going to have to sell next to get by, but if they don't open the borders and start up with normal postal service again soon it is going to get really ugly.

 

Somehow I don't feel sorry for the poor gold shop owners who just don't have the cash reserves to properly fleece the Thai public. It's not like they lose money. As the article said, the only sticking point right now is that the lack of airlines means the exporters are having trouble disposing of the excess onto the international market.  That is not a permanent problem, and in the mean time the gold shops are making money hand over fist. They give you less than they get by selling it to the exporters and refineries, and they are hedged against any price fluctuations.

 

Perhaps the BMA can step in and set up a cash for gold shop? Then watch the gold shops scream about how unfair that is.  They can't have it both ways.

[BEVUP]

6 hours ago, Blumpie said:

When I read this post that's the first thing that went through my mind too.  The safeguards afforded to first world nations simply don't exist here yet.  Thailand is, forgive me and I'm not trying to incite anger, a juvenile when it comes to problems like this and in many ways they simply lack the tools to help financially.

It's worrying.  

Agree with order Gold to the house ( no wonder the Chinese must have been pushing for the Kai Far ) Going to be a lot of land & houses gone

I would also bet its not only gold they prop up 

[Vigilante]

14 hours ago, EVENKEEL said:

What is Mickey mouse gold?

Low-purity gold.

 

[cooked]

18 hours ago, JimmyTheMook said:

 

- 4000B when you try to cash back at spot price.

 

 

Still better than paper money based on QE or internet money based on Bit coins. 

We used (pawned) our gold once when we needed cash quick for a car repair. Try getting a loan from a bank for that kind of thing.

[JimmyTheMook]

13 minutes ago, cooked said:

Still better than paper money based on QE or internet money based on Bit coins. 

We used (pawned) our gold once when we needed cash quick for a car repair. Try getting a loan from a bank for that kind of thing.

 

I have $ in reserve to pay for small expenses like fixing my car.

You'll need to learn some basic financial planning if you're pawning 

your gold to do that.

 

'nuff said. 

[parallaxtech]

6 hours ago, thaismog said:

If you sell they charge 200 per bar 

Hi!  Could you provide the name and address of the shop?  Thanks.

[fruitman]

22 hours ago, Curt1591 said:

My gold shop, of over 20 years, simply buys and sells gold, their gold only. They won't touch anything off the street. 

You buy at their sell price; you sell at their buy price,

So do they do buy from the street but won't touch it? That's how it's done during the wu-flu!

[webfact]

Gold shops face liquidity crisis as rising price tempts people to cash in

By THE NATION

 

 

The price of gold continues its rising trend and could soar beyond the Bt27,100 mark it hit eight years ago, Gold Traders Association president Jitti Tangsitphakdi said.

 

“As the global economy has slowed down, the demand for gold has risen because people view it as a safer asset than cash,” he said.

 

“Gold price this year could rise beyond Bt27,000 per baht weight, which will be a new high in eight years. However if the Covid-19 situation improves, the global gold price could gradually come down.”

 

As for the domestic market, the gold price has risen since New Year by Bt4,500 to Bt6,000 per baht weight, causing gold investors to sell their bars and jewellery for profit. “Another factor is that the Covid-19 situation in Thailand has driven some people to reserve cash for daily needs instead of gold,” he added.

 

“Many gold shops are suffering due to cash-flow problems as people are rushing to sell their gold but not many people are buying,” said Jitti. “Besides, international traders have not been able to export gold due to a shutdown of airlines and overseas markets.”

 

“We advise investors to postpone the selling of gold at the moment to allow time for gold shops to restore their cash flow,” he added. “If the situation persists, some gold shops may have to temporarily shutdown, which will affect several employees in gold-related businesses.”

 

As of Tuesday, the purchase price of gold bars was Bt25,900 per baht weight and selling price was Bt26,100, while buying price for gold ornaments was Bt25,574.92 and selling price Bt26,750. This marks a 21.11 per cent jump, or Bt4,550, from December 31, 2019 when selling price of a gold bar was Bt21,550.

 

Source: https://www.nationthailand.com/news/30386025

 

-- © Copyright The Nation Thailand 2020-04-15

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[Curt1591]

3 minutes ago, fruitman said:

So do they do buy from the street but won't touch it? That's how it's done during the wu-flu!

???? It's not that complicated to grasp. 

The gold they sell is their reserves and their own sources. It does not come from people cashing in. 

The only gold they buy back is gold previously sold to that customer. If resold, which I doubt they do, it would be sold like any other gold they sell, at their "sell" price. But, it wouldn't surprise me if they might send it to smelters to have it recast clean. 



 

[Susco]

8 minutes ago, Curt1591 said:

f resold, which I doubt they do, it would be sold like any other gold they sell, at their "sell" price. But, it wouldn't surprise me if they might send it to smelters to have it recast clean. 

I doubt this very much, because it would cost much more than their spread is

[parallaxtech]

There are thousands of those red gold shops across Thailand.  Are they regulated by a gold association?  The ones in Koh Samui seem to sell/buy gold bars at their prices no matter what the spot price happens to be.  What is stopping them from selling fake gold?  How would you report them?

[Yadon Toploy]

6 hours ago, Monomial said:

if they don't open the borders and start up with normal postal service again soon it is going to get really ugly.

They have just extended the flight restrictions until the end of April.

[Curt1591]

15 minutes ago, Susco said:

I doubt this very much, because it would cost much more than their spread is

This business is huge. It's been in business over 70 years, longer than most of us have been alive. 

There is a good chance that they do the casting themselves. That could be made up with "labor" charges.

But, we digress. 

People are cashing in because they bought gold as a nest egg for hard times. The bad news is that these are hard times. The good news is that people are getting a premium price for selling it. 

With the current economic situation, people would be foolish to pawn it. The near future is quite bleak. 

[Curt1591]

Just thought of something scary. 

If the gold shops start draining cash from the banks, ... 

 

Edited April 15, 2020 by metisdead
Oversize emoji removed.

[Yadon Toploy]

The majority will be pawning the gold, not just selling it off forever. They will still want a chance to get it back.

 

They will get a decent, but not full price for it, and they will pay interest every month to make sure they can get it back, this is normally 500-700thb in my recent experience.

 

Every gold shop I have ever dealt with, in several provinces, over 30+ years of being here does this.

 

Even that one in Yaowarat in Bangkok from the photos, which I have bought from several times before.

[kevin612]

Gold is real money but poor people need to sell gold in order to survive.