Domestic gold prices rose 750 baht to a new record high of 37,600 baht per baht-weight yesterday, as global prices jumped above US$2,200 an ounce for the first time, with traders expecting the metal to reach $2,300 in two months.
Spot gold was up 0.11% at $2,205.99 per ounce yesterday afternoon after hitting an all-time high of $2,222.39 in early trading as the Federal Reserve maintained its outlook for three interest rate cuts this year, suggesting it isn't alarmed by a recent uptick in inflation.
"Gold is now on the uptrend again and may possibly hit $2,300 per ounce in the next two months," MTS Gold said in its research yesterday.
MTS anticipates domestic gold prices to have short-term resistance at 37,700 baht, with support at 37,350 baht.
Hua Seng Heng said spot gold prices rose to a record high of $2,222 after the Fed decided to hold rates steady at 5.25%-5.50%.
The policy interest rate forecast (dot plot) still signals three cuts this year, while hedge funds bought 285 tonnes of gold.
The dollar is likely to continue depreciating, meaning gold prices can increase within a narrow range, pushing domestic prices to increase further, said an analyst at Hua Seng Heng.
YLG Bullion International said stronger demand for gold is partly supported by "de-dollarisation", meaning reduced reliance on the US dollar for international reserves and global trade amid continuing geopolitical tensions.
Consequently, central banks globally have reduced their holdings of the dollar for international reserves and significantly increased gold holdings to 1,082 and 1,037 tonnes in 2022 and 2023, respectively, skyrocketing from normal purchases of around 400-600 tonnes annually over the past decade.
The Stock Exchange of Thailand index also rebounded by about 1% yesterday, following a decline for four consecutive sessions, while other Asian stocks also tracked overnight Wall Street gains.
"Key support for global markets was the US rate decision, which renewed investor hopes for a June interest rate cut", as well as the 2024 growth upgrade to 2.1% from 1.4%, said Rakpong Chaisuparakul, senior vice-president of KGI Securities (Thailand).