Another “unprecedented” event has occurred in Thailand (for the previous one, read here), this time on the gold market.
Gold shops in Bangok’s Yaowarat district – famed for top-quality gold products – discontinued business during the Chinese New Year for the first time in history, planning to reopen tomorrow.
Jitti Tangsitpakdi, president of the Gold Traders’ Association of Thailand, was adamant that the closure was due to price volatility rather than the high volume of resales from consumers cashing in on the higher prices.
Before the Chinese New Year holiday break began on Sunday, gold shops in Yaowarat had sold a total of close to two tonnes of gold, worth around Bt6.8 billion.
Yet, on Saturday – the last day of business before the break – local gold prices jumped Bt450 in a single day, to Bt14,600 per 15 grams.
“World gold prices have been jumping up and down several times in a day,” Jitti said. “Shops have had to change their prices many times, so we decided to stop selling gold on Monday and Tuesday.” He added that gold markets in other Asian countries had also closed during the holiday period. (Nation)
This is untrue. Nothing less. Here is the proof.
Friday, they sold a lot of gold (because Chinese New Year). But you see on the chart that the big price jump occured during New York trading hours friday (when Thailand was already sleeping)…
Therefore, the price of gold in Thailand jumped… saturday. And saturday… it can’t move anymore, because international markets (New York and London) are closed.
(look here the Gold Traders Association of Thailand)
Therefore, during the week end, it’s the price set friday that should apply… 😉 Should.
Panick. Some people who bought friday… wanted to sell saturday, to pocket a quick profit ! And this is what motivated the shops to close. They were afraid to endure a cisor cut… by buying back sunday and monday at high prices… before a big drop of prices the following days.
Or… they didn’t want to sell at 14 600 THB sunday and monday… because they expected the price to shot up… again… now. By waiting 1 or 2 days, the shops could increase their profits…
And apparently they could be right (monday morning in New York, gold continues to go up !)…
In other words, down or up : they have cheated with market rules. 😉
They did the same than stock market operators who decide, in case of emergency (sharp fall), to close the market or suspend a stock for instance.
Anyway… “unprecedented “, as I wrote many times, is the main key word nowadays.
You want to understand the scale of the Big Global Crisis ? Learn how to say the word “unprecedented” in every language. 😉
Nothing is normal anymore. Black swans are multiplying.