Local confidence in gold price gets a boost for second month in a row
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THAILAND'S January gold price confidence index has risen for the second consecutive month after the baht's depreciation and demand for gold during the New Year holiday period, while major traders believe the price will rise to between Bt17,000 and Bt20,
Kamolthan Pornpaisalvichit, director of the centre, said the index had climbed 6.61 points to 58.33 this month, and an index above 50 meant expectations were high for positive returns on gold.
The said there remained risks for economies that pressured capital markets and gold might be used as a safe haven temporarily.
According to Bloomberg, the international gold price had risen to a one-month high on speculation that the US Federal Reserve would go slow in raising interest rates, weakening the dollar and boosting demand for the precious metal.
Bullion for immediate delivery advanced as much as 0.7 per cent to US$1,231.29 an ounce yesterday, the highest price since December 11.
Gold priced in euros rose to the highest level since September 2013 as Greece prepares for a January 25 election that Prime Minister Antonis Samaras has said may lead to an exit from the currency bloc should the opposition Syriza party win.
Political uncertainty in Greece that triggered the euro zone’s sovereign-debt crisis in 2009 comes at a time when the European Central Bank is trying to stave off deflation and revive growth.
“Gold looks to be supported this week by risk aversion in Europe brought about by Greece, as well as physical demand in Asia before the Lunar New Year,” Bloomberg quoted Huang Wei, an analyst at Huatai Great Wall Futures Co, as writing in a note. The Lunar New Year begins on February 19.
However, Kamolthan said negative factors for gold prices existed over the US economic recovery, with worries about the likely US interest-rate hikes, the appreciating US dollar, and weakening oil prices. He said the three-month gold price confidence index fell 11.30 points to 47.87, reflecting negative aspects about gold prices on concerns over likely US interest-rate increases.
Thasana Boonkwan, head of the Gold Research Centre’s working group, said that in a survey of 10 gold traders, four remained positive and expected to see rises, while four expected prices to be close to those in December.
