The domestic price of gold in Thailand may climb to 44,000 baht per baht weight, up from the current rate of 41,350 baht, according to the Gold Traders Association (GTA). This increase is expected as tensions in the Middle East escalate, the baht depreciates, and the US Federal Reserve is anticipated to continue reducing interest rates.
On Wednesday, the price of gold bars jumped by 400 baht per baht weight as the baht weakened to 33.02-33.04 against the US dollar, compared to Tuesday’s close of 32.76. Meanwhile, spot gold experienced slight fluctuations, dipping 0.1% to $2,653.95 per ounce, as investors remained cautious ahead of US economic data that could indicate the extent of potential Fed rate cuts later this year.
The demand for gold as a safe-haven asset surged following Iran’s missile attacks on Israel. The current price of approximately $2,650 per ounce is close to last week’s record high of $2,685, with continued tensions in the Israel-Iran conflict suggesting that a ceasefire is unlikely in the near future.
Gold prices have risen by 13% from July to September, bringing the total year-to-date increase to 28%. GTA president Jitti Tangsithpakdi noted, “The conflict in the Middle East appears quite serious.” He pointed out that domestic gold prices have surged by almost 1,000 baht in recent days.
Despite the current volatility of the baht making predictions challenging, Mr. Jitti expressed confidence that domestic prices could reach 44,000 baht per baht weight later this year as Middle East tensions persist. He also speculated that the Fed might implement an additional 50 basis points cut at its remaining two meetings in 2024.
Globally, gold prices could reach $2,700 an ounce by the end of the year, with expectations of rising to $2,900 by early 2025, he added. This forecast aligns with Goldman Sachs’ updated prediction, which raised its outlook for early 2025 from $2,700 to $2,900 per ounce, citing increased flows into exchange-traded funds attributed to interest rate cuts in the US and China, as well as heightened purchases by central banks.
Goldman Sachs reiterated its bullish outlook on gold, citing the ongoing advantages posed by lower global interest rates, increased demand from central banks, and gold’s ability to hedge against geopolitical, financial, and recessionary risks. The investment bank has also revised this year’s average gold price forecast to $2,395 per ounce from $2,357 and for 2025 to $2,973 per ounce from $2,686.
According to the World Gold Council (WGC), gold demand in Thailand continues to rise despite experiencing record-breaking prices, with the price reaching a new high of 42,000 baht per baht weight on April 19, 2024. WGC chief executive David Tait noted, “Thailand saw the highest growth in consumer demand across Southeast Asia in the second quarter, recording an impressive 20% year-on-year increase to nine tonnes, as Thai investors sought gold for protection against the weakening local currency.” This sustained demand highlights gold’s position as a dependable and preferred investment option in Thailand.
