Gold price hits high amid global surge

Gold price hits high amid global surge

Gold necklaces for sale at a shop on Yaowarat Road in Bangkok. (Photo: Nutthawat Wichieanbut)
Gold necklaces for sale at a shop on Yaowarat Road in Bangkok. (Photo: Nutthawat Wichieanbut)

The domestic gold price has hit an all-time high and is now on course to reach 38,000 baht per baht-weight this year as global prices have continued an upward trend to trade near the two-month high of more than US$2,080 per ounce, said the Gold Traders Association (GTA).

The domestic price of gold bars was adjusted twice by 50 baht each before noon on Monday to reach a new all-time high of 35,300 baht per baht-weight despite the recent appreciation of the Thai currency, said GTA president Jitti Tangsitpakdi.

Prices were up 400 baht per baht-weight to 35,200 baht on Friday alone as global prices stood at around $2,088.19. Gold futures hit a record close of $2,095.70 an ounce over the weekend, driven by weak US economic data and lower treasury yields.

The spot gold price edged lower on Monday morning but later rebounded to around $2,085 per ounce in the afternon. A weaker dollar makes gold less expensive for other currency holders while lower bond yields decrease the opportunity cost of holding non-yielding bullion.

"If the baht hadn't appreciated recently to about 35.80 baht to the dollar now, domestic gold prices would be higher than they are now," Mr Jitti said on Monday.

"We are now expecting the resistance level of gold prices of 38,000 baht, highly likely after the Fed starts cutting the rates in June this year as the market now widely expects," he told the Bangkok Post, adding that the GTA has so far maintained its forecast that global prices would peak at $2,100 this year.

Analysts shared similar views as a lower-than-expected ISM Manufacturing Purchasing Managers' Index in the US further weakens the dollar index. A research unit of Globex Securities projects world gold prices to move in a range of $2,070-2,090 per ounce in the short term.

Trader MTS Gold expects gold to move in a range of 35,150 to 35,450 baht per baht-weight on global prices of $2,090 per ounce for resistance and $2,070 for support. Hua Seng Heng, also a gold trader, forecasts the global price will hit $2,100 per ounce for resistance and $2,088 for support.

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