Shopping / Gold
Usually,
the buyer of gold jewelry has a far better control over
the pricing of in Thailand than in the West. This is because the
price of a piece of gold jewelry in Thailand clearly is, in many
cases, made up of two components: the price of the metal
and the charge for the workmanship that went into a piece.
Gold jewelry,
therefore, in general is a sound investment, and actually,
many Thais and Chinese invest their savings in gold. Thailand
has it's own unit of measurement for gold, called Baht
like the currency.
One Baht of
gold is 15.16 grams. A troy ounce, internationally used
to weigh gold, has 31.103 grams. A Baht weight therefore is equivalent
to .487 troy ounces.
Many of the
gold ornaments sold in Thailand contain exactly one, or
exactly one half Baht of gold. As prices at jewelers are
often per weight unit of one Baht, it is easy to assess on a daily
basis the value of any gold ornament one possesses.
Gold dealers
in Bangkok buy back at any time gold ornaments bought from them
or other stores at rates just minimally lower than their retail
prices.
On December
2, 1991, gold shops in Bangkok sold one Baht weight of gold for
around 4650 Baht (currency), while their repurchase prices
were around 4550 Baht. A typical price for the craftsmanship
for a gold chain was just around 150 Baht.
The international
gold price (mid-rate) for December 2, 1991 was given by the Bangkok
Post of December 3, 1991 as 368.25 US dollars. The average
Baht / Dollar rate was 25.43. This translates into 9346.59 Baht
per troy ounce of gold, or 4551.78 Baht (currency ) per Baht (weight)
of gold.
The example
shows on what minimal profit margin gold shops operate
in Thailand. While the international mid-rate for gold was just
4551.78 Baht (currency) per Baht (weight), Bangkok gold shops
at that day bought gold ornaments at 4550 Baht (currency) per
Baht (weight) and sold gold ornaments at just 4650 Baht (currency)
per Baht (weight), at a profit gain of just 100 Baht, or just
around 2 percent (plus a fixed charge of just 150 Baht for the
workmanship in a gold chain).
But in most
Western countries, there is not only a much higher profit
margin of the retailer and a much higher charge for the workmanship
(not separately indicated) but on top of that often a heavy value
added tax of up to 30 percent of the price of an ornament.
Thailand introduced
a value added tax effective January 1, 1992. At the time
this text was written, it hasn't been clear in how far the value
added tax would influence the gold trade.
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The orphanage had assigned him to daily physical therapy
sessions, He enjoyed human attention and contact for an hour a day in
addition to my visits, A regular dose of love had given him life.
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http://www.asiatour.com/thailand/e-02trav/et-tr232.htm
Jan Garanoz
869/116 Thanon Pemavipat,
Chiang Rai, 57000 Thailand
Created: September 1, 1995
Last updated: January 25, 2010