Thai Gold: Myths and Facts

Gold jewelery presented in a red ambience

Everyone will have noticed that the many jewelry stores, that are present in almost every town, almost always look the same. The red and gold colours signify luck in Chinese tradition, and the shops are largely owned by Thais of Chinese descent.

Gold instead of money

Gold isn't bought just to look pretty. Rather, it represents a sign of saved-up money, which is not scheduled for short-term purchases. The Thais believe in gold more than their own currency. This form of capital preservation was until recently unthinkable even in Western countries, resulting from the fact that gold jewelry in Europe can only be sold with very high discounts. Since the beginning of the last financial crisis more and more people have been turning their assets into gold - but not gold jewelry, as is the case in Thailand.

Almost everything that glitters is gold in Thai Gold

There is a simple explanation: Thai gold jewelry is actually made with a very high percentage of gold. All Thai gold that is used in the manufacture of jewelery has a purity of at least 96.5%. This means that only 3.5% of Thai gold contains materials that are not gold, but other metals. For comparison: in Germany, the most widely used gold in jewelry has a purity level of 33.4%. 66.6% of it is other metals. In Turkey and the East jewelry is made with 58.3% gold.

Thai gold is cheap, but not cheap - why?

Another factor that makes Thai gold jewelry a popular form of investment is it's low production costs. The prices that a European goldsmith charges means that the trinket's cost is far higher than the value of the gold it contains. On re-sale, one only receives the value of the weight of gold. So if a Thai decides to invest his savings in jewelry then he can be sure of being able to sell it at any time at a price almost identical to that which he paid. The difference between buying and selling prices is quite small, and if the price of gold rises in the meantime, the Thais may even make a profit.

Gold weights in Thailand - baht as a weight unit

In Thailand, the local currency is the baht (THB). A baht is divided into 100 satang - 25 satang is 1 salueng, hence 4 salueng equals one baht. So far, so good! Why is it that in Thailand you will often hear about '1 baht gold' and '5 baht gold'? The explanation is quite simple: baht in Thailand serves not only as the name of the national currency, but also to refer to the unit of weight in which gold is measured. Unfortunately, though there's a distinction in the context: 1 baht of jewelry gold weighs 15.16 grams, whereas bullion gold weighs 15.244 grams. The baht weight unit can be further divided into salueng - 1 salueng = 1/4 baht, or 50 satang = ½ baht gold. So if you want to buy a gold chain in Thailand that weighs one baht, you get a chain with a weight of around 15.16 gram, a purity of 96.5% and a price of a little more than 24,000 THB (as of June 2012).

Gold jewelery shops are also a bank

Anybody who has invested their money in Thai gold jewelry and then needs money for a limited time can pawn their gold in almost any gold jewelry store. You can simply go to the store, ask for the desired loan amount and the loan is issued, with your gold as surety, for the current (June 2012) interest rate of about 2% monthly. After each month, the interest payment is due. If you miss a payment then your gold is forfeit. You can redeem your gold at any time by paying off the loan, without any fees or formalities.

Everything that glitters is not always gold

There are reported cases when the unwary tourist was trapped with shiny yellow gold trinkets which unfortunately are not the same purity as 'real' Thai gold - some of them aren't made of gold at all. If you are ever offered 'cheap' gold jewelry, turn it down straight away and don't subsequently think that you've missed an opportunity.

Sinsod is no sin

A marriage in Thailand usually means that the groom's family have to pay a dowry (Sinsod). We could write an entire article about this custom, but here we'll concentrate on the gold and show a further widespread use of gold jewelry. Before the marriage the size of the dowry is agreed between the two families, and in more affluent circles this is also paid in the form of gold jewelry. This then adorns not only the bride, but also makes sure that the wedding guests can openly see how much the groom's family value the bride. This is very important in Thai society and is used to a great extent to enhance the family's reputation.

The beauty of Thai gold

To evaluate or compare the beauty of Thai gold jewelry with jewelry made from gold alloys with a higher proportion of foreign metals is, of course, impossible! Thai gold, and jewelry made from may it may be unbeatable in their beauty, rather garish and flashy or rough and unsightly - any judgment is of course personal, but what is not a myth and can't be disputed is that Thai gold jewelry 'ablates' relatively quickly. That is, you regularly see Thai gold jewelry that is very worn. This is due to the high purity of the gold and the resulting susceptibility to scratches and scuffs. Thai gold is very soft, making it unsuitable for the production of filigree jewelery.


For more information on Thai Gold:

Charts the course for the Thai gold price:

posted on: 04.10.2012 - last update on: 08.07.2014

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