Gold prices rallied to almost an eight-year high on Monday, breaching US$1,760 per ounce, following the US Federal Reserve chairman's pessimistic views on the US economic recovery and Covid-19 pandemic.
Gold prices in US dollar hovered at 1,762.23 per ounce while the local prices of bullion and ornaments with 96.5% purity were at 26,600 and 27,100 per baht weight, respectively.
Crowds thronged Yaowarat Road on Monday to sell their holdings, with few looking to purchase the precious metal. The selling spree has been going on since Friday.
Remarks by Fed chairman Jerome Powell that the US economy was unlikely to recover until next year have caused investors to seek refuge in the safe-haven asset, said Tanarat Pasawongse, chief executive of Hua Seng Heng Group of Companies.
“The markets are still worried that it will take longer for the economy to recover and the second wave of Covid-19 outbreak cannot be ruled out,” said Mr Tanarat.
"We are perhaps seeing the beginnings of the long-awaited inflation hedge occurring, as opposed to the safe-haven trade," said Jeffrey Halley, senior market analyst of Asia Pacific at Oanda Corporation.
The amount of monetary policy easing, conventional and unconventional, cannot be ignored and unlike the global financial crisis 2008, in a post-Covid-19 nationalised supply chain world, has the potential to generate inflation that has been missing in action for the past 20 years."