Gold set to lose more of its sheen
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GOLD PRICES are expected to move in a range of Bt17,000-Bt19,000 per baht weight amid concerns over further drops to Bt15,000 next year, said the Gold Research Centre. Kamonthan Pornpaisarnvijit, director of the centre, said local prices could slide furt
Analysts said it was possible to see gold sink as low as $1,000 per ounce. The average cost of gold production at mines is about $1,050 per ounce, though several mines produce gold more cheaply than that.
“The gold price could drop below $1,000 per ounce if the [US Federal Reserve] raises its [interest] rates faster than expected. However, if the European Central Bank and the Bank of Japan expand their stimulus, the US currency could continue appreciating,” Kamonthan said.
After its retreat, the gold price bounced back to $1,050-$1,100 per ounce on speculative purchases.
Next year could see a downward trend, with the gold price highly likely to plunge below $1,000 per ounce, or about Bt15,000-Bt15,500 per baht weight. The estimate is based on the Thai currency at Bt32.75 per US dollar.
If the Fed hikes its interest rates faster than expected, gold may lose its appeal for investors and capital may shift from gold to deposits, bonds and stock markets.
Investors and gold traders share the same view, avoiding gold investment this month. This is in line with the gold price confidence index, which stays at 46.77, according to the centre’s survey in November. An index score below 50 reflects pessimism on gold.
The three-month gold price confidence index stands above 50 at 59.95, up 8.83 per cent from October’s survey, reflecting optimism on next year’s upward gold prices during festivals, particularly in January and February.
This month, the global gold price, based on the survey, is expected to move in a range of $1,100-$1,280 per ounce, while the local gold price is estimated to be in the range of Bt16,000-Bt20,500 per baht weight.
