Instead, they have been snapping up the precious metal, especially in the favoured form of finely crafted necklaces and bracelets. "We have been selling well since April 17," said Chaikit Tantikarn, deputy manager of Tang Toh Kang in Bangkok's Chinatown. "Some of our necklace styles have sold out." Other shops have also seen brisk trade during the price slump.
"Every shop has been selling well since the end of Songkran (the traditional New Year)," said Jitti Tangsithtakdi, president of the Thai Gold Shops Association and owner of the Chin Hua Heng Gold Shop. "Sometimes we cannot keep up with the orders for new necklaces," he said. "We have the gold but we just can't make the necklaces fast enough."
At Thailand's gold shops, customers pay the going market price for the gold content in the necklace (96.5 per cent), plus a charge for the workmanship on the chain, about 70-80 dollars per baht weight (15.24 grams), depending on the shop's reputation. Gold was also selling well elsewhere in Asia last month. "Foreigners are selling, but Asians are buying," Chaikit said.
According to analysts, strong retail sales of gold in Asia has helped push the international price of gold upward, from 1,361 dollars per ounce on April 15 to about 1,465 dollars per ounce at the end of last week. For Thailand's estimated 6,000 gold shops, the highs and lows of international gold prices make little difference. "We only take a loss if people have pawned their necklaces with us and suddenly the price falls a lot," Jitti said.
Gold chains have long been popular. "A hundred years ago, necklaces were a form of savings, but also a hedge against unstable currencies, since gold prices were steadier," said Chaikit, whose great-grandfather founded the shop in Sampheng, the heart of the Chinatown district, in 1875.
"Things haven't changed much," he said. Tang Toh Kang was a talented goldsmith who migrated to Thailand from Fujian province, China. His workmanship soon earned him a large clientele, including the royal family. The shop was granted a Garuda emblem in 1921 by King Rama VI, who appointed the shop goldsmith for the royal household.
Tang Toh Kang is the only shop in Thailand to have a Garuda. The emblem has since been moved from above the front door to the sixth floor, to preserve it from the elements. The shop was named a Bangkok heritage site in 2004. It also houses a small museum dedicated to the art of goldsmithing. The most challenging period for the business came immediately after the Asian financial crisis struck in July 1997, triggered by the dramatic devaluation of Thailand's baht currency.
"The baht fell from 25 to 50 to the dollar in a matter of days, and so the price of gold shot up from 4,000 baht per baht weight (15.24 grams) to the 8.000 baht," Chaikit said. "A lot of people traded in their gold necklaces because they needed the cash, and they were getting double their money," Chaikit said.
It is the policy of Thailand's gold shops to guarantee that they will accept a returned necklace at the going market price. "In one week, we had to buy about a ton of gold," Chaikit said. "But we exported it all, so gold really helped Thailand a lot because we earned a lot of hard currency for the country."
When international gold prices started to climb, going from 322 dollars per ounce in 2003, to 1,900 dollars in late 2011, Thais tended to shift toward investing in gold bars instead of chains. The maximum gold content in Thailand's necklaces is set at 96.5 per cent, which makes the metal easier to mould for detailed workmanship. Gold bars are 99.99 per cent pure. "Now that the price of gold has come down a bit, people are buying necklaces again, just to wear and show off," Chaikit said.