Predicted surge in global gold prices to US$2,500 per ounce

Global gold prices are set to touch US$2,500 per ounce in the latter half of this year, as per predictions by local gold traders, despite a recent slump below US$2,300. The market has scaled down its expectations for US interest rate cuts this year to a maximum of two times, a reduction from the previously anticipated three to four times.

The president of the Gold Traders Association (GTA), Jitti Tangsithpakdi, attributes this optimistic view to the ongoing purchases of gold by worldwide central banks, given the current scarce supply of the precious metal.

“Previously, we expected the Federal Reserve would bring down the US rates three to four times, pushing the global prices to US$2,500 an ounce towards the end of this year, Now that one or two reductions are more probable, we expect gold to certainly surpass US$2,400, and even possibly reach US$2,500.”

His remarks came when spot gold maintained its position at US$2,299.49 per ounce on Friday, following a loss of over 1% the previous week, with US gold futures remaining steady at US$2,309.20. Since reaching a record high of US$2,431.29 in April, prices have plunged by over US$130.

Jitti attributed the recent price drops primarily to panic selling, particularly by those who had invested in gold futures for speculative purposes. He further added that they are now observing a key support level of US$2,275.

The research head at Hua Seng Heng Gold Futures, Cholathis Nualplab, concurred with Jitti’s prediction of the price touching US$2,500 later this year, following recent consolidation, provided there is no new global factor. He noted that investors have begun to express concerns about stagflation in the US as inflation persists and the Fed has indicated it has no plans to increase interest rates.

Even though Fed chair Jerome Powell dismissed stagflation discussions, stating the central bank has not witnessed any signs, investors remain sceptical and ponder over the Fed’s subsequent move if inflation remains stubbornly high for an extended period.

On Friday afternoon, the domestic gold price was quoted at 40,100 baht per baht-weight, following eight price adjustments, marking a loss of 150 baht from the previous day, with gold jewellery settling at 40,600 baht. The baht appreciated to over 36.8 against the US dollar, up from 37.20 baht, which is one element preventing domestic gold prices from falling significantly, reported Bangkok Post.