Local gold prices may increase temporarily due to higher demand fueled by festivals early this year, but the upward trend in US interest rates would likely bring prices back down later, the Gold Research Centre reported on Monday.
The Gold Research Centre predicts the domestic price of gold will rise temporarily early this year, driven by local demand, and then fall again on US interest rates. (Photo by Pattarachai Preechapanich)
Gold centre director Kamoltun Pornphaisarnvichit said concerns about overseas economic problems, the baht's depreciation and falling oil prices, coupled with rising local demand for gold during early annual festivals could push up the domestic price.
He said there were also signs of more gold purchases by fund managers late last year.
During the first half of this year, the Gold Research Centre expects the global gold price to move between US$1,100 and $1,350 an ounce and the local gold price to range from 17,500 baht to 20,500 baht per baht weight, based on an exchange rate of 33 baht per US dollar.
Short-term investors could speculate on the gold price but long-term investors might later accumulate gold because the US Federal Reserve was expected to raise the basic interest rate around the end of the second quarter or the beginning of the third quarter due to the expected US economic recovery, Mr Kamoltun said.
The Gold Price Sentiment Index rose by 6.61 points from last December to 58.33 points in January but the index for the next three months dropped by 11.30 points to 47.87 points due to concerns about the US interest rate, Mr Kamoltun said.