Wednesday, September 23, 2020

Gold gains from weakening dollar

Mar 27. 2020
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By The Nation

The price of gold rose by Bt250 per baht weight on Friday morning (March 27), the Gold Traders Association reported.

As of 9.27am, the buying price of a gold bar was Bt24,500 per baht weight and selling price Bt24,800, while the buying price of gold ornaments was Bt24,058.92 per baht weight and selling price Bt25,300.

The prices rose from Thursday’s close (March 26) when the buying price of a gold bar was Bt24,250 and selling price Bt24,550, while the buying price of gold ornaments was Bt23,816.36 and selling price Bt25,050.

Gold contracts in COMEX futures to be delivered in April spiked by US$4.90 to $1,649 per ounce at close on Thursday as investors turned to buy gold as a safe haven asset after the US revealed that the number of people registering for unemployment welfare rose to the highest in history.

Moreover, gold gained positive sentiment from the weakening dollar that caused the gold contracts price to be cheap for investors who hold other currencies.

The US Ministry of Labour revealed that Americans who registered for unemployment welfare rose to 3.28 million people last week, more than the expected 1.5 million people, the highest ever surpassing the 695,000 people during the 1982 financial crisis.

The huge increase was due to many businesses closing down amid the Covid-19 outbreak, resulting in many employees getting laid off.

Meanwhile, the US House of Representatives will debate and vote on a historic US$2-trillion bill to mitigate the economic impact of Covid-19 on Friday after the Senate voted in favour with 96-0 votes.

US President Donald Trump said he was ready to sign this bill if it were approved by the US House of Representatives.

A strategist at YLG Bullion and Futures advised investors to buy when the gold price rises between US$1,594 and $1,585 per ounce, while taking profit when the price drops to between $1,646 and $1,651 per ounce.

“We evaluate the support line at between 1,523 to 1,585 and resistance line at between 1,644 and 1,689,” the strategist said.

“We recommended following the US disclosure of Core Personal Consumption Expenditure, personal expenditure and personal income.”

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