Liquidating the Golden Goose

**tomcat** · 29-12-2020, 11:11 AM

Thais Dipping Into Gold Savings Undermine Steps to Rein in Baht

Thais Dipping Into Gold Savings Undermine Steps to Rein in Baht

By: Suttinee Yuvejwattana
Tue, December 29, 2020, 4:00 AM GMT+7

(Bloomberg) Gold sales in Thailand are surging as households reach for a financial lifeline amid the pandemic, a tactic that risks complicating government efforts to tame an export-stifling rally in the nation’s currency.

Exports of the precious metal surged to a record this year as prices climbed and Thais unloaded jewelry, bars and medallions to raise cash for routine expenses. Bullion traders expect the trend to continue into 2021 as the coronavirus drags on tourism and manufacturing, the mainstays of Thailand’s economy.

“Gold is easier to sell than land or condominiums,” said Pawan Nawawattanasub, chief executive officer of YLG Bullion International, one of Thailand’s top gold traders. “Thai people still have high stockpiles of gold, as the nation has been more of a net importer than exporter in the past.”

Quick cash from more than 1,800 gold shops across the nation has been one of the most common ways Thais have weathered the economic downturn, in addition to taking out short-term loans, skipping debt payments and finding second jobs.

As a result, gold exports jumped to 237.4 metric tons during January-October, compared with 170 tons for all of 2019, official data show. Net exports of 135 tons during the first 10 months of this year are the highest since at least 2010, according to Ministry of Commerce figures.

Gold Out, Dollars In

Those gold shipments, however, are widening Thailand’s current-account surplus, helping drive gains in the baht that threaten a fragile economic recovery. The baht has rallied more than 9% from its low in April, a surge also due to U.S. dollar weakness, while gold is up 25% this year after hitting a record in August.

The central bank is seeking to encourage more gold trading using foreign-currency deposits, an attempt to shield the baht from swings in sales of the precious metal when prices spike. The first such program, a venture between Bangkok Bank Pcl and gold marketplace Hua Seng Heng, started this month. The Bank of Thailand didn’t respond to an emailed request for comment.

“Baht strength will stay with us, as it comes from structural problems” such as a high current-account surplus and low investment, according to Somprawin Manprasert, chief economist at Bank of Ayudhya Pcl. “The planned steps on gold may help curb volatility only in the long term.”
Southeast Asia’s second-biggest economy is expected to rebound 3.2% in 2021 after this year’s 6.6% contraction, according to Bank of Thailand projections. With interest rates already at a record low, the central bank has turned its attention to the baht’s rapid rally, labeling it a risk to exports. It unveiled a raft of measures to encourage capital outflows to cool the currency, a task complicated as a weak U.S. dollar sparks fund flows into emerging markets globally.

The Bank of Thailand has seen its foreign exchange reserves jump by almost $100 billion in the past five years to a record $257 billion, or about 47% of gross domestic product, mainly from efforts to stem baht appreciation. That’s caught the attention of the U.S., which earlier this month added Thailand to a watch list of potential currency manipulators.

While a vaccine is being rolled out globally, the pandemic will likely continue to drive up poverty and unemployment rates in the near term. That means Thais are expected to continue selling gold next year, according to MTS Gold Group, a bullion exporter.
Suvirat Namvicha, 22, a Bangkok office worker, sold a gold necklace last month to pay medical bills and other expenses related to her pregnancy after her employer slashed overtime allowances.

“I need money to pay my bills, and selling gold is my best option,” Suvirat said. “I may need to sell my last gold necklace after my baby is born. Looking ahead, I only see rising expenses with limited income.”

**Shutree** · 29-12-2020, 11:47 AM

As a result, gold exports jumped to 237.4 metric tons during January-October, compared with 170 tons for all of 2019, official data show.

Net exports of 135 tons during the first 10 months of this year

Which means that gold imports in the first ten months amounted to 102.4 tons.
I wonder who chooses to import 100 tons of anything when someone else is exporting the same thing. Wouldn't it be cheaper to buy the local gold, rather than pay international freight charges?

**Latindancer** · 29-12-2020, 12:58 PM

Originally Posted by tomcat

“I need money to pay my bills, and selling gold is my best option,” Suvirat said. “I may need to sell my last gold necklace after my baby is born. Looking ahead, I only see rising expenses with limited income.”

Look for a large rise in the number of Thai women looking for Farang boyfriends.

Is there any way I can invest in this, in a leveraged way ? Being one of the boyfriends would be detrimental to my wallet.

**tomcat** · 29-12-2020, 01:37 PM

Originally Posted by Latindancer

Being one of the boyfriends would be detrimental to my wallet.

...keep the porridge bowl handy...

**harrybarracuda** · 29-12-2020, 03:43 PM

Originally Posted by Latindancer

Look for a large rise in the number of Thai women looking for Farang boyfriends.

Is there any way I can invest in this, in a leveraged way ? Being one of the boyfriends would be detrimental to my wallet.

Just remember to put "I make womens lives' a misery until they leave me" in your Tinder profile and you'll be fine.

**panama hat** · 29-12-2020, 03:49 PM

Originally Posted by Latindancer

Look for a large rise in the number of Thai women looking for Farang boyfriends.

Is there any way I can invest in this, in a leveraged way ?

That's just what poor women in a third world country need . . . a blood-sucking and violent septuagenarian

Originally Posted by Latindancer

Being one of the boyfriends would be detrimental to their wallet.

ftfy

**aging one** · 29-12-2020, 04:54 PM

Originally Posted by Latindancer

Look for a large rise in the number of Thai women looking for Farang boyfriends.

Is there any way I can invest in this, in a leveraged way ? Being one of the boyfriends would be detrimental to my wallet.

Damn....

Liquidating the Golden Goose-zero-etiquette-png

**Latindancer** · 29-12-2020, 05:10 PM

Well, that flushed out the tedious, predictable and childish comments, didn't it ?

**tomcat** · 29-12-2020, 05:26 PM

...hopefully, that's the last dribble^...

**Saint Willy** · 29-12-2020, 09:34 PM

Originally Posted by Latindancer

Look for a large rise in the number of Thai women looking for Farang boyfriends.

Is there any way I can invest in this, in a leveraged way ? Being one of the boyfriends would be detrimental to my wallet.

you already blew your last $5,000 AUD

**Neverna** · 29-12-2020, 09:53 PM

The last few months have been a good time to sell gold. Prices have been high.

**Saint Willy** · 30-12-2020, 04:56 AM

Originally Posted by tomcat

Exports of the precious metal surged to a record this year as prices climbed and Thais unloaded jewelry, bars and medallions to raise cash for routine expenses.

Is that not the exact reason Thai people (among others) invest and buy golf for? As in for a rainy day? And is the COVID economic crisis just such a rainy day?

**TheMadBaron** · 30-12-2020, 05:03 AM

Originally Posted by TheRealKW

golf

balls.

**Grumpy John** · 30-12-2020, 05:31 AM

Wifey bought some gold back when the price slipped under 18k. That and some she had for several years she sold for a nice gain. Almost paid for the new roof on the house. I gave her 10k but she only needed 5k so I got 5k back! What a great girl, ay!

**Saint Willy** · 30-12-2020, 06:47 AM

Originally Posted by TheMadBaron

balls.

oops.

fatfingers.

**lom** · 30-12-2020, 08:04 AM

Originally Posted by TheRealKW

fatfingers.

A too high believe in being able to type without looking at the keyboard and the result. Optimism!

**tomcat** · 30-12-2020, 09:52 AM

Originally Posted by lom

A too high belief...

...ftfy...larger keyboards are available, you know...

**Backspin** · 30-12-2020, 10:37 AM

Originally Posted by Neverna

The last few months have been a good time to sell gold. Prices have been high.

Gold has just drifted to the same price it was 9-10 years ago. It's the only asset that has gone sideways since 2008. Probably won't go sideways forever. Could get bitcoiny

**Saint Willy** · 30-12-2020, 11:53 AM

Originally Posted by Backspin

Could get bitcoiny

The economists probably have a proper word for that you know? I wonder what it could be... hmmmmm.

**Neverna** · 30-12-2020, 12:14 PM

**Backspin** · 30-12-2020, 12:29 PM

^

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