Domestic gold prices could hit 40,000 baht per baht-weight after the Federal Reserve cuts interest rates later this year, according to the Gold Traders Association (GTA), as the price reached a new high of 37,950 baht on Thursday, approaching the group's previous target of 38,000 baht.
The local gold price was upgraded five times by 50 baht each on Thursday, rising to 37,950 baht per baht-weight by mid-day, thanks partly to depreciation of the baht to almost 36.50 to the dollar.
Globally the metal was quoted at slightly below US$2,200 per ounce, a rebound from $2,163 on Monday, as investors awaited the US core personal consumption expenditure price index report on Friday to gauge when the Fed may begin cutting interest rates.
Gold prices hit a record high exceeding $2,200 last week.
"Local prices will hit 38,000 baht per baht-weight for sure," Jitti Tangsitphakdee, president of the GTA, told the Bangkok Post.
"We anticipate the price might hit 40,000 baht after the Fed starts cutting rates, most likely by the middle of this year."
As the Thai currency shifts 0.10 baht per dollar, it could make domestic gold prices move by 100 baht per baht-weight, he said.
Local gold prices have soared 2,000 baht this month and 4,000 baht since the beginning of the year, said Mr Jitti.
Warut Rungkum, director of money analysts at YLG Bullion, said the quick depreciation of the baht to around 36.50 to the greenback caused domestic prices rise to a record high on Thursday, though global prices steadied overnight.
If the Bank of Thailand's Monetary Policy Committee cuts the interest rate at its meeting on April 10, the baht could slide to 37 to the dollar as it would stimulate fund outflows, said Mr Warut.
"If a rate cut happens, the baht could trade at 37-37.20 to the dollar, the same high as last year," he said.
JPMorgan predicted yesterday gold could reach a $2,400 this year, supported by geopolitical tensions, inflation and moves by central banks.
"These factors remain unchanged, setting the stage for sustained demand over the course of April and beyond," the bank said.