COMMODITIES
Gold shops close amid swing
- Published: 27/01/2009 at 12:00 AM
- Newspaper section: Business
Heavily fluctuating gold prices in the global market and the closure of the Asian market until Wednesday to celebrate the Chinese New Year prompted gold shops in Yaowarat to suspend their business until tomorrow.
A garment vendor pauses to take lunch in front of a gold shop in Yaowarat. Gold shops in Bangkok’s Chinatown closed yesterday, marking the first time ever on the typically busy Lunar New Year’s Day. KOSOL NAKACHOL
"We decided to stop selling gold items, as world gold prices have been changing several times a day while the Asian market is closed until Wednesday, making it difficult for us to quote prices," said Jitti Tangsithpakdi, chairman of the Gold Traders' Association.
This is the first time gold shops have closed during the Chinese New Year, usually a period of heavy sales.
The precious metal's prices rose sharply during the week before the Chinese New Year, leading gold shops to adjust prices more frequently, by around 400 baht each time.
Gold bars rose by 950 baht since Jan 16. On Saturday, domestic gold prices were quoted at 14,600 baht for one-baht weight (15.16 grammes) compared with 13,650 baht eight days before.
The surge was attributed mainly to concerns about the world's financial crisis and plummeting stock markets, prompting global investors and speculators to shift to a safe haven.
The price gain also prompted locals to rush to outlets to sell gold during the weekend. Mr Jitti expects one billion baht of gold was sold by the general public.
Speculations on gold by various funds and financial institutions are causing gold prices to fluctuate because they are confident that gold still has high liquidity.
Morgan Stanley and UBS both recently raised their gold price forecasts, citing safe-haven demand for bullion amid turmoil in the banking sector and a gloomy outlook for the economy.
US bank Morgan Stanley raised its 2009 gold price forecast to $900 an ounce from $750, and its 2010 forecast to $1,000 from $825.
UBS said it now sees gold at $900 an ounce in one month instead of $800, and at $850 an ounce in three months instead of $800.
"Gold prices are likely to be higher by year-end in the context of aggressive monetary stimulus and falling confidence in paper money," Morgan Stanley said.
It added, however, that deflationary worries and a strong dollar could weigh on prices early in the year.
About the author
- Writer: Charoen Kittikanya
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