In the yellow

The crowds flocking to gold shops over recent weeks aren't crazy; they know it's worth the investment

Have you ever calculated how much you make on your savings? Three per cent... or maybe five, maximum? Which makes Bt50 for every Bt1,000 in a year.

There is an alternative if you want to increase that return - buying gold. You could see your savings double in less than three years, but you need to keep a close watch.

Investing in gold jewellery has been common for years, but gold-buying trends have changed over time. A large number of stock-market players got badly burned by the economic crash of 1997 and shifted their investment to gold - but gold bars.

Over the past decade, the ratio of gold bought as accessories to that bought as bars has shifted from 95:5 to 80:20, says Jitti Tangsithpakdi, president of the Gold Traders Association of Thailand.

In recent years, the price of gold has almost doubled, rising from Bt8,400 per one-baht weight (approximately 15.2 grams) four years ago to almost Bt15,000 in 2006.

Gold prices though are related to crude oil prices, so they've started fluctuating fast over the past several months. Once announced once or twice a day, the prices are now being relayed hourly.

The lack of confidence in the local economy doesn't help, and after rising to Bt15,200 in March, the price spiralled down to Bt13,500 in April. It's currently hovering between Bt12,000 and Bt13,500.

Let's do an easy calculation. If you'd bought 10 baht-weight measures of gold at Bt8,400 each in 2004 and sold them last week at Bt12,000, you would have made Bt36,000 profit in four years - better than the bank, eh?

Jitti explains that the gold market has begun to calm down, and prices are now within reach of many more pockets.

"But don't invest everything you've got," he says. Put in some money and keep track of how it's doing before investing a big chunk of your savings. Or you can divide it into several different investments if your capital is large enough - that's how professional gold investors manage the risks.

But before buying gold, make sure there are real gold bars in the market. Many gold investors warn newcomers that traders will sell them paper shares in gold when there's none of the real stuff around, then refund you the price written on the share when gold goes up.



Xtra

Nuggets of information

>> Standard gold in Thailand is 96.5-per-cent pure.

>> A one-baht weight of gold jewellery is equivalent to 15.16 grams.

>> A one-baht weight of gold bar is equivalent to 15.244 grams - gold jewellery is slightly more valuable as it has been crafted.

>> As with the currency market, the rate of buying rate is slightly lower than the selling.

>> Gold futures trading is postponed to early next year.