To:Bobby Yellin who wrote (204)
From: John Barendrecht Friday, Jul 4, 1997 10:02 AM
Respond to of 79916
Thai savers caught in falling gold, baht dilemma
By Anchalee Koetsawang
BANGKOK, July 4 (Reuter) - Thais who rushed into gold to flee the falling baht after the Wednesday de facto devaluation found themselves in a no-win situation as the price of gold dropped to a 12-year low.
``We are caught in a 'damned if you do and damned if you don't' situation here...don't know whether to buy or to sell,'' said Kraiwit Tangsangprateepratna, an executive of a small import-export firm in China town.
The gold price surged to 4,800 baht ($171.43) per 15.2 grammes for gold bar on Wednesday from 4,150-4,250 baht on Monday after the government scrapped the tightly control exchange-rate regime and allowed the baht to float.
The baht then weakened to 28.00-29.00 range from around 25.00 baht per dollar before the float, prompting savers who feared the value of their money would keep eroding to rush into gold.
Thai people traditionally buy gold actively at times of baht depreciation and political turbulence, such as in 1984 when the baht was devalued and during the oil crises of the mid-1970s and early 1980s.
But the buying spree subsided as gold prices fell to 4,600 baht per 15.2 grams on Thursday and 4,550 baht on Friday and is likely to drop further in line with the world prices, traders said.
The gold price fell below $325 an ounce on Friday to its lowest in 12 years after news that Australia's central bank had sold bullion from its reserves.
Some analysts said they saw a risk of further falls ahead.
Gold's all-time high was at $850 in January, 1980, after the Organization of Petroleum Exporting Countries (OPEC) quadrupled the price of oil and triggered violent inflation.
``By Thursday, people started to sell already when they saw the prices falling,'' said a Bangkok gold trader.
``It is very difficult to make a right decision in this kind of situation. People are weighing the prospect of the inflation after the float and the trend of gold prices,'' he said.
Canada sells no gold in June
OTTAWA, July 4 (Reuter) - Canada sold no gold in June, the Finance Department said on Friday.
Its holdings remained at 3.1 million ounces as of June 30, the department said.
The Canadian government has a policy of gradually selling off its gold reserves and replacing them with interest-bearing assets.
Market Data 
Markets 
AI
