Traders Say Price Decline Should Soon Bottom Out at B14,500
Gold prices are expected to come under pressure in the short term in keeping with the global trend, but industry veterans predict prices are unlikely to fall much below 14,500 baht per one-baht weight (15.16 grammes).
Local gold prices remain largely reliant on global price movements and foreign exchange, said Jitti Tangsithpakdi, the president of the Gold Traders Association.
Global gold prices based on the London market fell to US$933.75 an ounce on Tuesday - compared with $937.25 on Friday last week and $975.50 early in the month - as the dollar rose on optimism about its improved world reserve currency status and emerging signs that the US economy has started to recover.
Local prices moved with buying prices on Monday, with gold bars down to 15,100 and ornaments down to 14,887.12 baht, from 15,350 and 15,129.68 baht, respectively, on Friday.
Local buying prices held steady yesterday at 15,100 baht for gold bars and 14,932.6 baht for ornaments, as world gold prices moved up to about $936 an ounce from New York's close of $934.60 on Tuesday.
In Mr Jitti's view, gold still has ample room to rise in the longer term, as the world economic outlook remains unclear and the US economy has yet to recover, despite improving figures for its unemployment rate, consumer confidence and retail sales.
Gold demand remains strong, especially from China and India for their national reserves. Major emerging markets are also considered likely to diversify their reserves away from the greenback, boosting demand for bullion as a hedge against the US dollar.
Kritcharat Hirunyasiri, the president of MTS Gold, a leading wholesaler and retailer of gold ornaments under the Mae Thongsuk brand, said bullion currently made up only 1.6% of India and China's national reserves, a low percentage compared with 20-30% in developed countries and a global average of 10%.
"China, for instance, has secretly bought about 500 tonnes of the precious metal to boost its gold reserves over the last eight months," said Dr Kritcharat.
"China, which currently has about 1,000 tonnes in its reserves, is expected to buy more gold in the near future."
Despite the baht's rise, it is unlikely to increase greatly, as the central bank and the government are closely monitoring its movements to curb their impact on exports, he said.
"I'm feeling upbeat about bullion's prospects as a long-term investment vehicle," said Dr Kritcharat.
"The prices are expected to move at about 15,000 baht or slightly down over the next three months."
Local gold prices remain largely reliant on global price movements and foreign exchange, said Jitti Tangsithpakdi, the president of the Gold Traders Association.
Global gold prices based on the London market fell to US$933.75 an ounce on Tuesday - compared with $937.25 on Friday last week and $975.50 early in the month - as the dollar rose on optimism about its improved world reserve currency status and emerging signs that the US economy has started to recover.
Local prices moved with buying prices on Monday, with gold bars down to 15,100 and ornaments down to 14,887.12 baht, from 15,350 and 15,129.68 baht, respectively, on Friday.
Local buying prices held steady yesterday at 15,100 baht for gold bars and 14,932.6 baht for ornaments, as world gold prices moved up to about $936 an ounce from New York's close of $934.60 on Tuesday.
In Mr Jitti's view, gold still has ample room to rise in the longer term, as the world economic outlook remains unclear and the US economy has yet to recover, despite improving figures for its unemployment rate, consumer confidence and retail sales.
Gold demand remains strong, especially from China and India for their national reserves. Major emerging markets are also considered likely to diversify their reserves away from the greenback, boosting demand for bullion as a hedge against the US dollar.
Kritcharat Hirunyasiri, the president of MTS Gold, a leading wholesaler and retailer of gold ornaments under the Mae Thongsuk brand, said bullion currently made up only 1.6% of India and China's national reserves, a low percentage compared with 20-30% in developed countries and a global average of 10%.
"China, for instance, has secretly bought about 500 tonnes of the precious metal to boost its gold reserves over the last eight months," said Dr Kritcharat.
"China, which currently has about 1,000 tonnes in its reserves, is expected to buy more gold in the near future."
Despite the baht's rise, it is unlikely to increase greatly, as the central bank and the government are closely monitoring its movements to curb their impact on exports, he said.
"I'm feeling upbeat about bullion's prospects as a long-term investment vehicle," said Dr Kritcharat.
"The prices are expected to move at about 15,000 baht or slightly down over the next three months."
By: CHAROEN KITTIKANYA
Published: 18/06/2009 at 12:00 AM
Quoted from: Bangkok Post
