Global gold prices could hit US$1,875 per ounce in the near term as the war in the Middle East shows no signs of ending soon, according to the Gold Traders Association (GTA).
GTA president Jitti Tangsithpakdi said gold prices have shot up by $20-30 per ounce since the war between Israel and Hamas militants broke out over the weekend.
The price of gold was at a one-week high of $1,860 on Wednesday morning and rose to briefly to $1,870 in the late afternoon.
The association anticipates gold will trade within a range of $1,845-1,875 in the short term unless the violence escalates, he said.
Gold prices increased the most since July on Monday as demand for a safe haven soared after tensions intensified in the wake of a terrorist attack by Hamas on Israel on Saturday.
Spot gold, a significant indicator in the precious metals market, reached $1,865.19 on Tuesday, marking its highest point since Sept 29.
"Normally war causes gold prices to rise for 3-4 days after the conflict erupts. That happened when Russia invaded Ukraine last year," Mr Jitti told the Bangkok Post.
Meanwhile, the domestic price of gold fell by 150 baht to 32,250 baht per baht (weight) on Wednesday morning as the Thai currency appreciated to 36.55 baht to the dollar, he said.
MTS Gold expects the global gold price to have a resistance level of $1,880 per ounce and a support level of $1,845 per ounce.
The domestic price is expected to have a resistance level of 32,300 baht per baht (weight) and 31,800 baht per baht (weight) for support, said the trader.
"Gold is likely to be traded around $1,860 per ounce as concerns are easing that the fighting between Israel and Hamas will not affect the global economy," said MTS Gold.
Gold prices slid yesterday, partly attributed to a weakened dollar after several US Federal Reserve officials suggested the recent surge in treasury yields might make further rate hikes less necessary.
The dollar dipped to nearly a two-week trough against a basket of currencies, tracking a slide in US Treasury yields that have retreated from the 2007 highs scaled last week.
Neel Kashkari, president of the Minneapolis Fed, said on Tuesday it is possible the recent rise in longer-term treasury yields means the US central bank need not lift the rates as much.
Raphael Bostic, president of the Atlanta Fed, predicted no more US rate hikes.
Higher rates raise the opportunity cost of holding gold, which is priced in dollars and does not yield any interest.