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  1. #1
    Thailand Expat misskit's Avatar
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    Gold and Futures Trading in Thailand Changes from Baht to US Dollar

    After years of regulations confining gold trade to the baht, the central bank announced a policy to allow trading gold in US dollars in Thailand. Market participants say the central bank will consider US dollar-denominated trade for foreign-related capital market products in the near future.


    “The investment world has changed. Domestic investment alone is not suitable and diversifying overseas is better. Thais should be gradually educated about foreign exchange risk,” said a source familiar with capital markets.


    The source said relaxing rules and letting people open foreign currency deposit (FCD) accounts freely is one measure to help people understand risk related to foreign asset investment.

    The Thailand Futures Exchange (TFEX) and the Stock Exchange of Thailand (SET) have long requested permission for an exemption from the central bank to trade foreign-related products such as gold online futures, oil futures and foreign equity products in the US dollar.

    They were earlier denied this because the Currency Act of 1958, which mandates trading goods and services here must be conducted in baht. A former regulator at the central bank who requested anonymity said gold trading is speculative and does not create economic value.


    Yet with the right implementation, trading gold or assets in foreign currency terms could be a good risk management tool, said the former regulator.


    “I understand the central bank’s purpose [in allowing trade of gold in dollars] because gold imports and exports could disrupt the trade balance and the exchange rate,” the former regulator said. “It would be better if the impact of exchange rates is separated from gold import-exports.”


    The source said currencies and interest rates are quite complicated and traded among giant players. Trading gold in dollars will be more advantageous for those with high net worth, said the source.


    Furthermore Trading gold in the dollar may take a few years of adjustment, added the former regulator.

    Gold and Futures Trading in Thailand Changes from Baht to US Dollar

  2. #2
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    Here we go, not enough physical gold on the planet to cover the futures trading if it was all called. Get ready.

  3. #3
    Thailand Expat tomcat's Avatar
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    Quote Originally Posted by deeks View Post
    Here we go, not enough physical gold on the planet to cover the futures trading if it was all called. Get ready.
    ...as buying gold (like other commodities) is speculation rather than investment, actual possession of gold metal isn't necessary (gold mining stocks are a good proxy)...in troubled times, the higher the price, the rush to buy, eventually fewer buyers and subsequent price decline...holding physical gold offers no return (like dividends) that can be used for expenses and, in fact, needs to be guarded and is therefore, an additional expense...try telling that to a gold bug, however...
    Majestically enthroned amid the vulgar herd

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    From 2018 about the reduction in gold being mined and the amount of "paper gold" increasing. One thing i know is that holding it your hand feels much safer than a number on a computer screen.
    Physical Gold Production Peaking, No Shortage In Paper Gold

  5. #5
    Thailand Expat jabir's Avatar
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    Quote Originally Posted by deeks View Post
    Here we go, not enough physical gold on the planet to cover the futures trading if it was all called. Get ready.
    How do they estimate these things!

    According to the World Gold Council, about 200,000 tons of gold has ever been mined, with approx 1/3 of that in accessible reserves, and the entire world's gold supply would fill two Olympic swimming pools.

    US gov figures give roughly the same tonnage, and that it would all fit into a 28m cube (22k cu metres).

    Google has an Olympic pool at c2500cu metres, with just under 20 tonnes gold per cu metre, so two or more of these experts should go back to school.

  6. #6
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    Quote Originally Posted by misskit View Post
    Gold and Futures Trading in Thailand Changes from Baht to US Dollar
    No.

    Quote Originally Posted by misskit View Post
    the central bank announced a policy to allow trading gold in US dollars in Thailand.
    An additional option to the, current and not cancelled, Baht method. Unless your report is wrong.
    Last edited by OhOh; 13-08-2020 at 08:52 PM.

  7. #7
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    Quote Originally Posted by jabir View Post
    How do they estimate these things!
    Quote Originally Posted by jabir View Post
    According to the World Gold Council, about 200,000 tons of gold has ever been mined,
    Historical records which are known and were priced into the selling price at the time. Bullion banks keep records of all gold bars and the movement of the numbered bars from their stocks to any purchasers. Any remelted gold to say Kg bars as opposed to Oz bars or one grade to another, 95% to say 99.999 is recorded.

    Industrial and retail bars/jewellery likewise recorded.

    A pretty accurate total is known. The whereabouts/ownership of it, somewhat murkier.

    Today's gold price is determined by speculators who desire a profit. Occasionally there is high demand, at other times less so. Markets are available worldwide including Thailand to allow the speculators to speculate. Some win others lose. Same as other speculative investments.

    There is allegedly much more underground awaiting to be mind.

    The raw gold, in the ground, has a number of factors which "estimate" the selling cost of this gold and what it may be priced at when sold.

    Purchasing the right to mine a certain location, physical mining (locating it, building mines, paying for labour, purchasing of equipment and consumables, environmental ....) and refining of the "underground gold" will have costs, necessary profits etc. Which will determined if it is ever mined.

    No estimate can be made as to the selling price of the "underground gold" until it's actually accomplished. If speculators deem the risk acceptable.
    A tray full of GOLD is not worth a moment in time.

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