Gold prices are expected to reach new highs of US$2,300 an ounce and more than 40,000 baht per baht weight in 2024 amid unfavourable global economic conditions, says local trader MTS Gold.
As interest rates are expected to fall and the dollar weaken, there is an opportunity for gold, known as a safe-haven asset, to soar in 2024, said Kritcharat Hiranyasiri, president of MTS Gold.
"The dollar has been depreciating as the market expects the interest rate hike cycle to end and several central banks around the world are waiting for the right moment to cut rates. Now is the time for investors to return to gold price speculation," he said.
Geopolitical conflicts have erupted in many regions, helping to push up gold prices recently, said Dr Kritcharat.
"We must see whether the situation intensifies in 2024, but there is a chance for gold to surge further," he said.
Dr Kritcharat said the key event that would trigger a rapid rise in gold prices would be the Federal Reserve initiating a cut in rates.
The US central bank recently sent clear signals about three rate cuts this year, from a 22-year high of 5.25%-5.5%.
The political situation in the US could also affect gold price trends. The presidential election in 2024 may prompt policymakers to ease monetary policies to stimulate the economy and boost stock markets, he said.
"An easing of interest rates might be on the cards," said Dr Kritcharat.
Another factor to monitor is medium-term US bonds, as many of them are due to reach maturity. This will tighten liquidity in the financial market, becoming another factor supporting the price of gold this year, he said.
Gold prices rose 11% last year. A similar uptick in 2024 would put them in the range of $2,280-$2,300 per ounce, said Dr Kritcharat.
Domestic prices, which surged 13% in 2023, are expected to rise by 11% this year to 38,000-40,000 baht per baht weight.
A price range of 33,500-33,700 baht per baht weight represents an opportunity to buy and collect or sell for short-term profit, he said.
Risk factors that must be monitored include strong US inflation, as it would pressure interest rates to remain high, as well as the US economy, said Dr Kritcharat.
If the US economy remains robust, the US dollar might appreciate, weighing down gold prices, he said.
Meanwhile, if the war in the Middle East escalates, the price of gold and other safe-haven assets should increase, said Dr Kritcharat.