Gold shortage in Chinatown
published : 7 May 2013 at 15:52
writer: Online Reporters and Bloomberg
Many gold shops in Yaowarat, Bangkok's Chinatown, have no gold for sale after prices plunged below 20,000 baht recently, sparking a buying frenzy, Gold Traders Association chairman Jitti Tangsithpakdi said on Tuesday.
Jitti: Gold shops in Chinatown have run out of gold.
"There's no gold to be sold because manufacturers can't produce the items quick enough [to meet the demand]," said Mr Jitti, owner of Chin Hua Heng gold shop.
Some gold shops even confronted each other, competing to buy gold from sellers, he said.
He said investors with gold in hand should not sell at this time because prices would likely increase from now on, after the gold bar price earlier tumbled to 18,600 baht per baht-weight.
"I think gold prices will be about 23,000 to 24,000 baht by the end of this year," Mr Jitti said.
As of 2.55pm on Tuesday, buying prices stood at 20,208.28 baht per baht-weight for gold ornaments and 20,500 baht for gold bar.
Selling prices were set at 21,000 baht per baht-weight for gold ornaments, and 20,600 baht per baht-weight for gold bar.
On Jan 2, gold prices were as high as 24,650 baht.
The Bank of Thailand announced that country imported 190 billion baht of gold in the first quarter of 2013, up 61% year-on-year.
In China, gold consumption soared 26% in the first three months of 2013 from a year ago amid strong bullion sales and rising jewelry demand, according to the China Gold Association.
Total consumption in China, the world's largest user after India, reached 320.54 metric tonnes in the first quarter. Purchases of gold bars surged 49% to 120.39 tonnes, while jewelry gained 16% to 178.59 tonnes, the association said.
It said gold output in China, the world's largest producer, gained 11% in the same period to 89.91 tonnes.
Meanwhile, Warren Buffett said there were better places for gold investors to put their money.
“What motivates most gold purchasers is their belief that the ranks of the fearful will grow,” Buffett, 82, wrote last year in a letter to shareholders. “During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As ‘bandwagon’ investors join any party, they create their own truth -- for a while.”