Gold prices are likely to hit a new record high soon, driven by a weakening US dollar and increased gold purchases by China for its reserves, according to Bualuang Securities (BLS).
On Wednesday, spot gold prices stabilized around $2,761.93 per ounce, while US gold futures rose by 0.1% to $2,769.80. Although prices were trading close to record highs last week, they dropped over 1% on Tuesday as investors sold off bullion to mitigate losses from a significant decline in technology stocks, prompted by DeepSeek’s affordable and energy-efficient AI model.
BLS noted that last month, the Federal Reserve reduced US interest rates by 0.25%, indicating the beginning of a comprehensive rate-cutting cycle. The economic outlook under the Donald Trump administration, along with inflation trends, are crucial factors that will influence the Fed’s interest rate decisions. For 2025, the market anticipates one or two rate reductions, with the first potentially occurring in June.
Gold appreciated about 30% last year, lagging behind Bitcoin, which soared by 120%. Analysts believe that gold remains in a robust uptrend, having previously achieved a record high of $2,789 per ounce. According to BLS, gold is showing bullish momentum this month, nearing key resistance levels.
The current price movements indicate a likely breakout past minor resistance levels, approaching last year’s peak, as noted by the brokerage. Investors are encouraged to keep an eye on gold prices and look for a breakout to new all-time highs, with the expected resistance range between $2,800 and $3,000 per ounce due to a weakened US dollar and rising gold purchases by the Chinese government.
On Wednesday, the Gold Traders Association adjusted domestic gold prices, increasing them by 100 baht. The new price is 44,150 baht per baht-weight for gold bars and 44,650 baht for gold jewelry.
Pawan Nawawattanasub, CEO of YLG Group, stated that the demand for gold during the Chinese New Year festival has remained strong, as gold is a favored gift in Asia. However, during China’s extended Golden Week holiday, when the gold market is closed, demand temporarily declines, potentially presenting a buying opportunity, according to Mrs. Pawan.
She added that if gold prices experience only minor declines post-Golden Week, a rebound is likely. Historically, gold prices tend to rise within three days of the Chinese market reopening, with the potential to test resistance levels of $2,800 to $2,850 an ounce, according to YLG.
Another contributing factor to rising gold prices after the Lunar New Year is the uncertainty around Trump’s policies, particularly the possibility of him pressuring the Fed to lower interest rates, noted Mrs. Pawan.
