Gold price to reach eight-month high
published : 17 Jan 2023 at 05:46
newspaper section: Business
writer: Nuntawun Polkuamdee
The price of gold is expected to reach an eight-month high of US$1,950 an ounce this week on looming fears of a global recession after the latest US inflation rate fell to 6.5%, said SET-listed Hua Seng Heng Gold Futures.
Gold prices closed $23.50 higher on Friday, touching their highest level since April 2022 at $1,921.80, thanks to a weak dollar.
As US inflation eased to 6.55% in December, from 7.1% previously, the market expects the Federal Reserve (Fed) to slow down interest rate hikes.
The price of gold has risen by more than 5.26% since the beginning of the year. Hua Seng Heng Gold Futures stated that gold prices could continue to rise in the short term but warned of a correction after Chinese New Year, which takes place on Jan 22.
Last week, the US released its consumer price index, reflecting the slowing US inflation.
Another upcoming event that will affect the movement of gold prices this week is the 2023 World Economic Forum (WEF) to be held in Davos during Jan 16-20.
Tanarat Pasawongse, chief executive of Hua Seng Heng Group, said investors would keep a close eye on this year's WEF, the first face-to-face meeting of the event in two years, which the world's leading political and business leaders would attend. The main theme of the WEF meetings is to discuss ways to avoid a recession.
Taming inflation, energy shortages as a result of the Russia-Ukraine war and a new wave of Covid-19 infections as China reopened earlier than anticipated are set to be the main issues at the WEF, he added.
"The WEF meeting will seek a solution to the current issues and directions of the global economy. The discussion would guide investors in making investment decisions in the financial markets," said Mr Tanarat.
Gold purchases in China, the world's largest gold consuming country, have jumped ahead of the Chinese New Year as gold is linked to Chinese culture and traditions.
Investors, however, expect it would take about 3-4 months for the Chinese economy to recover after the recent reopening.
The market also viewed that the Fed would slow down rate hikes when it meets at the end of this month.
The US central bank is expected to lift the rates by just 0.25% at its first meeting in 2023.
Mr Tanarat expects gold prices to continue to surge, moving in a range of $1,950-1,965. A short-term price correction is projected after the Chinese New Year.
Domestic price of gold bars will have support of 29,300 baht, and 30,000 baht for resistance, he added.
- Gold price