Gold prices predicted to hit US$2,250 per ounce by year-end

A revision in the global gold prices outlook has been announced by the Gold Traders Association (GTA), projecting an increase to US$2,250 per ounce by year-end from its previous estimate of US$2,100. This adjustment comes in the wake of domestic prices reaching an all-time high of 36,700 Thai baht per baht weight yesterday morning.

The President of GTA, Jitti Tangsithpakdi, attributed this surge to a continued buying trend, as customers anticipate further price escalation. Unlike previous scenarios where individuals sold their gold stocks to capitalise on price hikes, consumers are now holding on to their assets.

Tangsithpakdi also highlighted the role of central banks in various Asian countries, such as China and Thailand, in this price rise. Their increased gold purchases for international reserves have significantly contributed to the upward trajectory of gold prices.

Notably, the domestic gold bars’ price experienced a 150 baht increase per baht weight yesterday, March 14, touching 36,700 baht. However, a downturn was observed by midday when the price slipped 50 baht to 36,650 baht.

While there was a slight dip in global prices recently, it recovered to US$2,170 per ounce by late afternoon. This resurgence was fuelled by a robust US dollar and increased Treasury yields. Traders are now keenly watching for further US economic data, which could influence the Federal Reserve’s decision on a potential mid-year interest rate cut, Tangsithpakdi said.

“There is a possibility global gold prices could reach US$2,250 per ounce by the end of the year. A price increase is most likely after the Fed starts cutting interest rates.”

Despite these developments, the GTA has decided to uphold its domestic price forecast of 38,000 baht per baht weight for the third quarter, citing the influence of other factors like the exchange rate.

Meanwhile, JPMorgan Chase & Co has estimated that gold prices could hit US$2,500 an ounce this year, following last Friday’s bullion record of US$2,195.15, reported Bangkok Post.

Natasha Kaneva, Head of the Global Commodities Strategy team, during a Bloomberg TV interview that she believed US$2,500 is a possibility.

“We need confirmation from continued moderation of inflation and the jobs numbers, as well as confirmation the Fed is indeed cutting rates.”