Thai gold prices poised to break past record amid global surge

Gold prices in Thailand are poised to break past the previous high of 42,150 baht per baht-weight (15.2 grams) as international gold prices hover near record levels, nearing US$2,700 per ounce, according to local traders.

Yesterday, September 25, domestic gold prices rose by 200 baht, reaching 41,100 baht for gold bars, as the price of bullion increased by 0.3% to top US$2,665 per ounce. This follows a report indicating a significant drop in US consumer confidence, the most substantial decline in three years.

Additional factors contributing to the increased demand for gold include heightened geopolitical tensions, such as the Israeli airstrikes in Beirut that resulted in the death of a senior Hezbollah commander on September 24.

China’s recent economic stimulus measures, including interest rate cuts, have further supported the rise in gold prices, a local trader reported.

“Gold has surged almost 30% this year, with silver also seeing a 35% increase.”

The rallies gained momentum following the US Federal Reserve’s recent rate cut of 50 basis points last week.

Traders are now anticipating at least another 75 basis points of rate cuts by the US central bank before the end of the year.

Lower interest rates typically benefit gold and silver, as these metals do not offer interest, and a weaker dollar makes them cheaper for buyers using other currencies.

Jitti Tangsithpakdi, Gold Traders Association President, predicts that global prices will reach US$2,700 in the fourth quarter. He attributes this to the Fed’s clear signals of at least another 50 basis points cut at the remaining two meetings this year and another 100 basis points next year.

“Domestic prices have been pressured by the strong baht.

“But when the global price hits US$2,700 an ounce, we’ll probably see domestic prices topping the previous high of 42,150 baht per baht weight.”

The Thai baht, bolstered by foreign inflows, political stability, and rising gold prices, has appreciated by 4.6% this year, making it one of the leading currencies in Southeast Asia.

The baht’s continuous appreciation, gaining 0.30 baht to the dollar to reach 32.63, has caused domestic gold prices to rise by only 200 baht, even as global spot prices surged by as much as US$30 per ounce.

Local trader MTS Gold forecasts support for world gold prices at US$2,645, with resistance at US$2,675. For domestic prices, it sees support at 40,800 baht and resistance at 41,200 baht., reported Bangkok Post

YLG Bullion and Futures projects that global prices will hit US$3,000 by 2025, after reaching US$2,700 this year, pushing domestic prices to a range between 42,400 and 47,000 baht per baht weight.