Gold prices remain on an upward trend, and could possibly reach US$2,015 per ounce in the near term, although some periods of volatility are expected along the way, says the Gold Traders Association (GTA).
Spot gold was up 0.4% to $1,997.39 on Thursday morning, as the US dollar edged lower and the benchmark US 10-year treasury yields fell to a two-month low a day earlier. US gold futures gained 0.3% to $1,998.60.
The precious metal traded at a three-week high of $2,007.29 on Tuesday before it faced selling pressure after strong initial jobless claims data unsettled a market that expectats the Federal Reserve to start cutting rates around June as the US economy slows.
The market's assumption of a Fed rate-cutting cycle commencing earlier next year has been the prime force driving gold prices higher, the GTA said. Lower interest rates typically boost gold prices as they reduce the opportunity cost of holding non-yielding assets.
GTA president Jitti Tangsithpakdi said the Fed's views on interest rate trends, fluctuations in the rate of the baht against the greenback, and the ongoing conflict in the Middle East are the main factors driving global gold prices.
The dollar was down 0.1% against rival currencies yesterday, making gold less expensive for holders of other currencies. The baht was largely flat, opening at 35.20-35.22 baht to the dollar, against Wednesday's close of 35.19 baht.
Domestically, the gold price fell by 100 baht early yesterday morning but then increased by 50 baht shortly after, bringing the price to 33,330 baht for one baht weight of gold.
"Prices will remain volatile," Mr Jitti told the Bangkok Post, adding the GTA expects bullion to move in a range of $1,975 to $2,015 per ounce in the near term.
Gold trading company MTS Group said gold prices remain on an upward trajectory as the market believes the Fed will keep interest rates unchanged at its meeting next month.
The company expects gold to trade at $2,005 per ounce for resistance and $1,980 for support. Domestic gold prices are projected to stand at 33,400 baht per one baht weight of gold for resistance and 33,000 baht per one baht weight for support.
Meanwhile, YLG Bullion and Futures cautioned that a price slide is possible, predicting gold prices to move in a range of $1,974-1,980 per ounce for support. It estimates the resistance range to be at $2,007-2,009 per ounce.