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Gold lust drains Bangkok

Seeking security, and a bit of spiritual comfort, Thais buy gold faster than shops can sell it.

BANGKOK, Thailand — When the price of gold shifts, Yaowarat roars.

In recent months, mob scenes have jammed up the Bangkok boulevard, nicknamed “Golden Road,” the spine of the Thai capital’s Chinatown. The district is a gold buyer’s mecca where high-purity amulets and rings gleam inside more than 130 gold shops.

But the thousands pouring into Yaowarat lately have come seeking a rawer commodity: smooth golden bars, marked only with a metalsmith’s seal.

As Stock Exchange of Thailand indices drop to new lows and markets worldwide continue to wither, Thai investors are gravitating towards gold en masse. The buying rush has depleted merchants’ stock so drastically that, in late October, the Gold Trader’s Association indefinitely banned the sale of gold bars on weekends, the peak purchasing days.

Gold’s heightened allure here amounts to more than just shrewd investing, according to market watchers. It appears to also offer Thai buyers some spiritual comfort as collapsing markets and political turmoil offer none.

“Economists believe people make rational, logical decisions,” said Ammar Siamwalla, a prominent economist with the Thailand Development Research Institute.

But Siamwalla, at a panel on Thailand’s economic future, suggested that heads and hearts guide investors. For many in Bangkok, gold satisfies both.  “I’m sorry to sound racist,” Siamwalla said, “but Asians have a hang-up about gold.”

The precious metal shimmers from Thailand’s temple spires. Thais prostrate themselves before room-sized Buddhas wrought of gold. It is the ideal wedding gift, birthday present or even salary bonus.

Gold is traditionally seen as a safe haven when markets implode. But the recent financial meltdown has instead led to volatile gold prices. Though many gold buyers expected its price to soar as the global market was in a tailspin, gold has both dipped and risen — making room for quick-turnaround profiteers.

Thailand’s gold investors are a mix of these short-term buyers, who may sell as soon as a day later, and security seekers, said Kritcharat Hirunyasiri, general secretary of the Bangkok-based Gold Traders Associaiton. “People are concerned when the (Thai) stock market struggles,” Hirunyasiri said. “That’s why gold shops are so crowded now.”

More than 7,000 gold shops operate in Thailand, most with the same decor: walls painted deep crimson, the day’s gold bar price chalked into the front window, walls strung with glittering chains.

Even on weekdays, buyers walk in with cash-stuffed pockets and leave with bags full of gold bars — a profoundly personal transaction compared to calling brokers or trading online. There is not yet a gold futures market in Thailand.

Thailand’s gold bars are sold in a signature 15.16-gram (0.53 oz.) weight called the “baht” (the unit of measurement shares a name with the local currency). Each bar can cost between $300 and $400, depending on the day’s price.

In Thai terms, this is a hefty sum. But in a world where investors watch their nest eggs shrivel on digital screens, the gold bar offers wealth you can grip in your hand.

On low-price days in recent months, customers have packed gold shops from door to display case. Police are summoned to direct traffic. Some shop owners, blessed with desperate buyers, are free to curse at those who don’t place orders hastily enough. One shopkeeper revealed the largest purchase she’d ever seen: a 100-bar buy worth $36,000 — equivalent to an upper-middle-class annual salary in Thailand.

“Before, people played the stocks,” said Supaporn Sangdumru, a gold seller at the Thong Bai shop on Yaowarat. “Now they play the gold market.”

Radda Feung Chonmani, a Chinese-Thai, has a marquee seat to the madness. Her glass-making shop off Yaowarat Road looks out on one of the district’s busiest gold emporiums. “People spill into the streets,” she said. “The shops don’t even want to close at night.”

Radda, too, is swayed by gold’s spell, sometimes pooling money with her girlfriends to buy one or two bars. She also purchases necklaces and ornaments for “beauty,” she said. “Gold is auspicious,” she said. “Even for weddings, Thai women don’t want diamonds. We want gold.”

But recently, Radda has stopped draping her neck in gold. Times are hard and necklaces can be swapped for quick cash on Yaowarat.

“Thai people don’t wear as much gold these days,” she said, citing a fear of robbers. “The economy is down. It’s too dangerous.”

http://www.globalpost.com/dispatch/thailand/090105/gold-lust-drains-bangkok