Gold – the analog Bitcoin

Investments in precious metals in the golden land

Gold belongs to Thai culture. Holding gold in Thailand is a traditional way of keeping savings. Ownership of physical gold is therefore highly common in the golden land. Siam had used gold as currency since its founding and Thailand is even today a gold importer. The private acquisition and sale of gold can be accomplished discreetly and inconspicuously. This makes the Thai jurisdiction to a reasonable holding location for even big gold investments.

Local gold shops act as the place of choice to buy, but also to sell gold based on its weight. Combined with pawn shops, this creates a complete gold economy without the need to hark back to Thailand’s official currency.

Thai gold is typically 23.2 karat or .965/1.000 (96.5%) pure, the balance is a blend of copper and/or silver and/or zinc and/or manganese. Thai gold is very yellow and has sometimes a strangely unsettling effect on the Western observer. It is quite soft and therefore subject to wearing down fairly rapidly and subject to denting if knocked.

One troy ounce is equal to 31.1034768 grams, but Thai gold is traditionally measured and prized in “Baht” with one Baht bullion gold equal to 15.244 grams or 0.4901 troy ounces, and one baht of jewelry (fabricated) gold weighs 15.16 grams, The Baht weight should not be confused with Thailand’s official currency, the Thai paper Baht, although both terms have the same origin. The one baht weight unit can be further divided into four salueng or into 100 satang weight.

Traditional investments in Thai gold vs. international standards 

The area around Yaowarat Road in Bangkok’s China Town is praised for its fair dealings. Thai jewelers charge a nominal fee only for the craftsmanship of creating a piece of jewelry in gold. The metal is usually not stamped or certified. Due to the unique nature of Thai bullions they can realistically only be bought and sold within Thailand – elsewhere, their value will be discounted.

Traditional gold coins like Krügerrand, Maple Leaf, American Gold Eagle or Wiener Philharmoniker enables internationalization of gold investments in Thailand. Although the acquisition process is different from gold jewelry, the export and international trade compensated for this inconvenience.

Gold investments follow the same “be your own bank (BYOB)” principle like Bitcoin. Therefore, it is not inappropriate to qualify gold as the “analog Bitcoin”. The practical handling, the investment purpose and the legal and tax treatment show significant similarities. Bitcoin, as well as gold, are the antidote to modern money theories while fiat money loses value till it crashes.

 

Legal considerations of buying and holding precious metals

Buying and owning gold is legitimate and legal. Thailand has no restrictions on cash transactions. However, practical limitations exist because the highest bank bill is the THB 1000 note. Anti-money laundering provisions have to be taken into consideration.

The commercial sale of gold is a regulated business. The labeling for gold shops is controlled by Thailand’s Consumer Protection Board under the Consumer Protection Act. This includes weight, gold percentage, and price. The price is controlled by the Gold Trader’s Association following market value.

Import and export restrictions create a serious hurdle. Undeclared gold in the hand luggage might be subject to a 100% customs rate plus fines. The export country might charge import duty and VAT as well.

Manufacturing of gold-ware is under List 2 Group 2 of the Foreign Business Act a business that could have an adverse effect on arts and culture, customs, and native manufacturing/handicrafts and, therefore, is reserved for Thai businesses. According to a Royal Decree 1973, updated in 2005, the profession as a goldsmith, silversmith, and other precious metalworks is prohibited to foreigners.

Capital gains on gold are taxable – in theory. Gold wealth is subject to Thai inheritance taxes which kicks in for total taxable assets above THB 100 million.

Professional services for gold investments

PUGNATORIUS Ltd. is a Bangkok-based specialist provider of bespoke transactional legal and tax advice in the corporate and property legal and taxation industry sectors. The law firm provides discreet and confidential legal and tax advice on the acquisition, sale, and possession of gold and other precious metals in Thailand and abroad.

The law firm offers efficient transaction support services on gold investments – strictly in compliance with Thai and international laws and tax rules.

Disclaimer: A little knowledge is a dangerous thing.This low-resolution high-level outlook constitutes neither legal advice nor an attorney-client relationship.


The Thai Gold Traders Association, World Gold Council, Thailand Futures Exchange (TFEX), TFEX Gold Futures Trading Volume, LBMA Gold Price,YLG Bullion & Futures, Hua Seng Heng Gold Futures, MTS Gold Futures, TC Ausiris Futures, Ausiris Futures Co Ltd AFC, YLG Bullion & Futures Co Ltd YLG, MTS Gold Futures Co Ltd MTSGF, Hua Seng Heng Gold Futures Co Ltd HGF, Classic Gold Futures Co Ltd CGF, Globlex Securities Company Limited GBS, KT ZMICO Securities Company Limited KTZ, KGI Securities (Thailand) Public Company Limited KGI, Thanachart Securities Public Company Limited TNS, MTSGF – MTS Gold Futures, MBKET – Maybank Kim Eng Securities (Thailand) Co Ltd, PHATR – Phatra Securities Public Co Ltd., HGF – Hua Seng Heng Gold Futures Co Ltd., KTZ – KT ZMICO Securities Co Ltd, KGI – KGI Securities (Thailand) Co Ltd, YLG Bullion, Yoo Lim Gold Factory Ltd., MTS Gold, Ausiris Co, part of the Baan Chang Thong Group, ,KTAM Gold ETF Tracker – GLD, ThaiDEX Gold ETF – GOLD99, K GOLD ETF – KG965, Bualuang Chay Gold ETF – BCHAY, Thanachart Gold ETF – TGOLDETF

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