Iran factor unlikely to push gold bar to Bt30,000
The head of the Gold Traders Association does not expect the domestic price for gold bar to touch Bt30,000 per baht weight this year merely because of speculative demand due to rising tensions concerning Iran.
Many experts have predicted that the local gold price will rocket to such a level due to developments surrounding the Middle Eastern country.
Domestic gold rose by Bt200 per baht weight to Bt25,450 yesterday, while gold for immediate delivery climbed to US$1,746.40 per troy ounce up from $1,722.80 on Monday, the Associated Press reported.
Based on statistical data, gold prices surged $30 an ounce during the Gulf War period but retreated to normal levels after the conflict ended, Jitti Tangsithpakdi, president of the Gold Traders Association, said yesterday.
Prices also soared by $30 following the terrorist attacks on the US on September 11, 2001, but again returned to normal levels after the situation eased, he said.
Even if the Iran situation worsened, the precious metal’s domestic price may not be able to reach Bt30,000 per baht weight, given those historical data, he added.
Gold prices will be volatile this year, especially in the second quarter, and investors should be careful, he cautioned.
Gold is expected to fall below $1,522 an ounce in the second quarter, before heading up to the previous high of $1,922, or Bt27,000 per baht weight, achieved last October.
Euro-zone developments could exert a strong influence on gold prices this year, Jitti said.
So far this year, domestic gold has advanced quickly by Bt2,000-Bt2,200 per baht weight and investors are recommend to gradually take profits, he said, adding that speculation is expected to result in a rise of 10 per cent this year from 2011 levels.
About 10 per cent of people have bought gold ornaments following last year’s floods, which is a surprise, Jitti said, as only 5-10 per cent of them bought gold ornaments and the rest purchased gold bars.
Chaiyaporn Nompitakcharoen, head of tactical research at Bualuang Securities, said foreign investors continued to invest in equities despite their net selling in the final quarter of last year.
Foreign investors were net buyers of Thai stocks worth Bt5.45 billion yesterday, driving the Stock Exchange of Thailand (SET) Index up 14.96 points, or 1.36 per cent, to close at 1,116.08. Turnover was Bt45.37 billion.
He expects foreign capital to continue to flow into the Thai equity market. Since the beginning of the year, about Bt13 billion worth of foreign capital has gone into the local stock exchange.
However, given the US and euro-zone developments, Chaiyaporn expects no more than Bt30 billion-Bt40 billion to flow into the Thai bourse this year.
Normally, about Bt70 billion-Bt100 billion worth of foreign capital enters the SET during a bull-market year, he added.
