Gold prices are expected to rise above US$2,000 by the end of the year, amid expectations of an economic slowdown in the US and Europe, intense geopolitical factors, and fewer interest rate hikes, says YLG Bullion & Futures.
Interest rate increases have recently made gold investments unattractive, but now that rates are nearing their peak and the US dollar is depreciating, such factors are supporting gold prices, said YLG chief executive Tipa Nawawattanasub.
"When interest rates turn downward, it will be an opportunity to invest in gold," she said.
Last week the US Federal Reserve announced a 0.25% increase in its policy interest rate to a range of 5.25-5.50%, the highest level in 22 years.
YLG expects the Fed to only raise interest rates once more this year. After that, there will be a period of three to five years during which the price of gold is expected to increase, according to YLG.
Gold is normally perceived to be a safe haven asset, with demand particularly high during recessions.
"Today, the global economy faces lots of uncertainties and only Asia has positive growth. Geopolitics, meanwhile, has intensified for both the China-US and Russia-Ukraine conflicts and need to be monitored," Ms Tipa said.
Therefore, it is possible that gold could reach new highs by the end of the year, she added.
If the gold price passes $2,079 an ounce by year-end, there is a chance it would continue to rise to $2,400 an ounce in the next resistance. Therefore, YLG advises investors to accumulate gold at $1,900 an ounce.
"If you look at the macro level, you will see that the gold price has been on the rise for three consecutive years, through the pandemic and the Russia-Ukraine war. Even though these situations have eased over the past year and interest rates have been on a rise, gold has held steady at a high level," said Ms Tipa.
Once the interest rate policy -- a factor pressuring the gold price -- has gone, it is expected that this period of increases in the price of gold will last for three to five years, she added.
YLG still recommends investors invest 5-15% of their total investment portfolio in gold. In order to reduce portfolio volatility, investors should not invest in gold to any greater degree than this level.
Ms Tipa said investors can invest in gold through the futures markets, such as the Thailand Futures Exchange and the Chicago Mercantile Exchange. By investing through these derivative markets, investors can take profit when the gold price moves up or down.