Gold speculators should not rush to purchase gold at this time despite a sharp drop in the price because gold could could fall even further, Jitti Tangsithpakdi, chairman of Gold Traders Association, said on Thursday.
Buyers crowd a gold shop in Yaowarat to snap the gold chains or bars amidst a significance drop in gold price on April 4, 2013. (Photo by Pawat Laopaisarntaksin)
Mr Jitti said people should hold off for another day or two, because the gold price is on a downtrend.
He said he was puzzled by the drastic drop in the price, despite the poor state of the US economy and th growing tensions with North Korea.
These situations should instead cause gold to rise, because it is a safe asset, he said.
Mr Jitti added that recent gold price movements are relatively unusual. He said the reason behind this is probably due to the hedged funds that sell their holdings which caused gold price to decrease.
Tanarat Pasawongse, managing director of Hua Seng Heng Gold Futures Co, also advised gold speculators to monitor the situation before speculate the gold price.
He said the US Department of Labour will announce the number for monthly non-farm employment, which will have a significant influence on gold price.
Mr Tanarat, however, encouraged long-term gold investors to take advantage of the current situation.
He added that people have flood into gold shops because gold price took a heavy fall, down 350 baht from Wednesday's close.
Some gold stores are sold out of hand-made gold jewellery, having only the machine-made ones left, because the heavy influx of gold buyers.
With the facts that gold ornaments take a long time to make and many goldsmiths have left the business as poor sales reduce the demand of their skill. Therefore, the gold shops now do not have supplies to serve the sudden rise in demand.
The Gold Traders Association around noon announced the buying prices at 21,193.68 baht per baht-weight for gold ornaments and 21,500 baht per baht-weight for gold bar.
The selling prices were set at 22,000 baht per baht-weight for gold ornaments, and 21,600 baht per baht-weight for gold bar.
Gold went up 50 baht since the morning's announcement.