Increasing tensions in the Middle East could push gold prices past US$2,000 per ounce, while domestic gold prices could reach 34,700 baht after two spikes yesterday, say local gold traders.
Spot gold rose 0.4% to $1,986.79 per ounce yesterday morning, while US gold futures edged up 0.1% to $1,997.10 as growing concerns about the Israel-Hamas conflict increased appetite for safe-haven assets.
Domestic gold prices increased twice by 400 baht per baht weight yesterday to 34,150 baht for gold bars, in part because of the stronger dollar.
"The vow by Israel's leader to launch a ground invasion to push Palestinians out of the Gaza Strip has raised investor concerns that the conflict could become the Third World War," said Varut Rungkhum, head of research at YLG Bullion & Futures.
The main UN agency in Gaza halted aid operations and reportedly partially pulled out its team on the ground, signalling that the war might escalate, he said.
"We project global gold prices to reach $2,003 per ounce, while domestic prices could be in the range of 34,400-34,700 baht," said Mr Varut.
As some analysts expect gold prices to reach $2,100 per ounce this round, he agreed prices should rise as they reached $2,070 during the earlier phases of the Russia-Ukraine war.
The market is waiting for US third-quarter GDP data to project the Federal Reserve's interest rate trends.
As US bond yields edged up again overnight, analysts are now predicting the central bank might increase the rate one more time this year, said Mr Varut.
Local gold trader Hua Seng Heng said gold prices are sideways up, with a key resistance level of $2,000 per ounce, while the support level is $1,950-1,960.
In addition to the Middle East conflict, China's growing demand has pushed up gold prices, with the mainland's demand rising 7.3% year-on-year in the first nine months of 2023.
MTS Gold also anticipates gold prices to rise, with $2,000 per ounce the major resistance level and $1,965 the support level.
Comex gold prices are now estimated at $1,975 and $2,010 per ounce for the support and resistance levels, respectively.
Domestically, gold is expected to trade at 33,900 baht per baht weight for a support level and 34,300 baht for resistance, said MTS Gold.