Gold prices could hit US$2,015 per ounce in near future, says GTA

The Gold Traders Association (GTA) projected a potential rise in gold prices, possibly hitting US$2,015 (71,535 baht) per ounce in the near future. However, this trend may be interspersed with periods of market volatility.

Yesterday morning, spot gold saw an increase of 0.4% to US$1,997.39, spurred by a dip in the US dollar and a fall in the benchmark US 10-year treasury yields to a low not seen in the last two months. US gold futures also saw a slight gain of 0.3% to US$1,998.60.

Tuesday had seen the precious metal trading at a three-week high of US$2,007.29 per ounce. However, it experienced selling pressure following unsettling initial jobless claims data, disrupting market expectations of the Federal Reserve beginning to cut rates around June in response to a slowing US economy, the GTA said.

“The market’s assumption of a Fed rate-cutting cycle commencing earlier next year has been the prime force driving gold prices higher.”

Lower interest rates often result in a boost to gold prices due to the decreased opportunity cost of holding non-yielding assets.

President of the GTA, Jitti Tangsithpakdi, named the Federal Reserve’s predictions on interest rate trends, fluctuations in the value of the baht against the dollar, and ongoing tension in the Middle East as the primary drivers of global gold prices.

Gold prices fluctuate

The dollar saw a decrease of 0.1% against rival currencies yesterday, rendering gold less costly for holders of other currencies. The baht remained largely flat, with an opening of 35.20 to 35.22 baht to the dollar, in comparison to Wednesday’s close of 35.19 baht.

Domestically, the price of gold dropped by 100 baht earlier yesterday morning, but soon rose by 50 baht, resulting in a price of 33,330 baht for one baht weight of gold, Jitti told Bangkok Post.

“Prices will remain volatile.”

He added that the GTA anticipates bullion to fluctuate within a range of US$1,975 to US$2,015 per ounce in the near term.

MTS Group, a gold trading company, also perceives an upward trajectory in gold prices, largely due to the market’s expectation that the Federal Reserve will maintain current interest rates at next month’s meeting.

The company projects gold to trade at US$2,005 per ounce for resistance and US$1,980 for support. It also anticipates domestic gold prices to be set at 33,400 baht per one baht weight of gold for resistance and 33,000 baht per one baht weight for support.

Conversely, YLG Bullion and Futures has suggested the possibility of a dip in prices, forecasting gold prices to vary within a range of US$1,974 to US$1,980 per ounce for support. It sets the estimated resistance range at US$2,007 to US$2,009 per ounce.