The plunge in gold prices has wreaked havoc on Thai pawnshops where 80 percent of received assets are the precious metal, according to the Bangkok Metropolitan Administration (BMA).
The BMA runs about 20 pawnshops in the capital, with others privately operated. Gold is the most common asset for pawnshops.
Heads of BMA-owned pawnshops held an urgent meeting to discuss measures to cope with the declining gold prices.
Pantawan Kingthongkam, chief of the BMA pawnshop in Pradipat area, said the value of unclaimed assets remained normal but it should be clearer at the end of this month whether more people will leave their pawned assets unclaimed.
Pawnshops normally pledge gold at 85 percent of the market price but the unfavorable sentiment has forced them to adjust it downward to 70-75 percent.
One of the clients said she pawned her gold at Bt15,000 per baht weight and paid 1 percent interest – a rate she described as reasonable.
State-owned and private pawnshops have been unusually quiet in the last few days when the business is traditionally busy at this time of the year as parents need money for their children for the approaching new school term.
Most private pawnshops have pledged gold at Bt13,000-15,000 per baht weight in the last few days. Gold prices on the Thai bullion market adjusted 12 times on Friday to finally close at Bt19,250 per baht weight.
