Local gold prices hit all-time high
- Published: 18/02/2009 at 12:00 AM
- Newspaper section: News
Local gold prices have hit an all-time high, soaring to break 16,000 baht per one-baht weight (15.16 grammes), following rising world gold prices as investors continue to seek safe-haven bullion as the global economy deteriorates.
Thai gold prices were yesterday quoted at 15,750 baht per one-baht weight for gold bars and 16,150 baht per one-baht weight for gold ornaments, rising from 15,400 baht and 15,800 baht respectively.
Gold Traders Association chairman Jitti Tangsithpakdi said local gold prices would continue to fluctuate and increase significantly in line with global gold prices.
Gold futures rose Tuesday in the United States to end early Wednesday morning (Thailand time) at their highest level in seven months, near $970 (35,000 baht) an ounce, as investors seeking a safe haven against economic troubles bought into the metal.
Heightened risk aversion also pushed up the US dollar and Treasury prices, while oil futures and global stock markets skid. Safe-haven buying raised holdings in the largest gold exchange-traded fund to a new record high near 1,000 tonnes, according to the latest data.
In Hong Kong, the major gold trading market in Asia, bullion climbed to US$959.05 an ounce, the highest since July 22, thanks to demand from investors who are fretting about a further slump in the global economy and looking to the commodity to preserve their wealth. Domestic gold prices increased six times yesterday.
However, Mr Jitti did not expect people would flock to sell gold since they sold a large quantity three weeks ago during the Chinese New Year period. Many gold shops have been less active recently.
"There is a chance that gold bar prices will move up further. We think it's time for gold owners to shed a certain portion of their gold holdings to take profits," he said.
Gold for February delivery rose $25.50, or 2.7%, to end at $967 an ounce on the Comex division of the New York Mercantile Exchange, the loftiest closing level for a front-month contract since July. It rose to as high as $973.80 an ounce earlier in the session.
Monday's gain followed on gold's 3% increase last week. The metal is now just about $36 below its record high above $1,003 an ounce set in March 2008.
Trading more actively, the April gold contract ended at $967.50 an ounce, up 2.7%.
"I think $1,000 is pretty much almost in the cards here just given how strong the trend has been," said Brian Hicks, co-manager of the US Global Investors Global Resources Fund,
The strong demand for gold is "a reflection of just how concerned investors are becoming about the ongoing volatility in the equity market as well as the financial crisis," he added.
Gold holdings in SPDR Gold Shares, the largest gold exchange-traded fund, rose 1.6% from a day ago to 985.86 tons on Friday, according to latest data from the fund. That's up more than 180 tons from a month ago.
In spot trading, the London afternoon gold-fixing price - a benchmark for gold traded directly between big institutions - stood at $968 an ounce Tuesday, up $25.50 from the previous day.
In other metals trading, March copper tumbled 7.5% to $1.423 a pound, while March silver rose 2.8% $14.01 an ounce. March palladium added 0.6% to $217.90 an ounce, and the April contract for sister metal platinum rose 3.5% to $1,098.30 an ounce.
Gold's gain on Tuesday came amid a slump in global stocks.
US stocks fell, with the Dow Jones Industrial Average down more than 250 points. Asia and Europe shares also moved lower, with the banking sector sliding on concerns the global economic crisis is deepening.
Moody's Investors Service flagged concerns about European banks' exposure to Eastern European economies.
"Gold is moving as the last phase of the crisis appears to have started," said Martin Hennecke, associate director with Tyche Group in Hong Kong.
Gold prices, which tend to move in opposite directions to the US dollar, have moved in tandem with the greenback recently, as risk aversion lifted both the dollar and gold. (with Agency reports)
About the author
- Writer: WORANUJ MANEERUNGSEE and CHAROEN KITTIKANYA
