Gold stable but could hit new high in first half
Traders expect little movement in the gold price for the coming Chinese New Year festival as individual investors have already purchased the metal in recent weeks over rising concerns on global recession and instability.
However, one trader expects the gold price to hit a new high in the first half of this year.
Jitti Tangsitpakdee, president of the Gold Traders Association, said the price had fluctuated quite a lot but movement was slow at the moment. Investors purchased gold over the past couple of weeks on rising concerns about the conflict between the United States and Iran and possible closure of the Strait of Hormuz, a major oil-transport route. This trading activity caused the gold price to increase significantly, but it has stabilised for now.
Still, in the first six months, the international gold price should trend even higher than last year’s peak of US$1,922 per ounce as the precious metal is still recognised by consumers around the world as a safe haven, especially during times of economic instability.
"I think gold is still a valuable asset for individual investors during a global economic recession," Jitti said. "The gold price is quite high at the moment but its devaluation after this will create new purchases, and that will push it to another new high in the first half of the year. However, it should be less than $2,000 per ounce."
Nattawut Wongyoavaluck, a gold analyst for Globlex Holding Management, said the oil price was projected to fluctuate during the coming Chinese New Year period and individual investors who bought gold in the weeks before the festival might see unsatisfactory returns.
"The gold price has increased dramatically since the beginning of this year, from $1,565 per troy ounce on the first working day of 2012 to $1,647 [as of January 12]. The return is at 5.80 per cent, which is higher than its average recorded over the past 10 years," he said.
