Bangkok: Gold prices have dropped below $5,000 per ounce during the Chinese New Year, with global prices dipping under $4,900 per ounce. This decline, coupled with a strengthening Thai baht, has led the Gold Traders Association to report its lowest prices this morning, with ornamental gold priced at 73,300 baht per baht weight and gold bars at 72,500 baht. Despite this downturn, analysts maintain that gold will continue to be a safe-haven asset.
According to Thai News Agency, Mr. Nattawut Wongyaowarak, Director of Research at Globlex Securities Co., Ltd., stated that the gold price trend during this period is anticipated to remain within the range of $4,800-$5,200 per ounce. This trend is driven by renewed buying interest following the sharp decline in prices. However, geopolitical uncertainties and concerns over the appointment of the new Federal Reserve chairman, Kevin Warsh, could lead to delays in interest rate cuts this year. Mr. Wongyaowarak advised short-term speculative trading within the specified range if prices do not surpass the $5,200 resistance level. For long-term investment, he suggested buyers wait to purchase if prices fall to the $3,900-$4,400 range.
Key economic factors influencing gold prices include the weakening of the Thai baht due to the Bank of Thailand's measures to control online gold trading, which is favorable for Thai gold prices. Additionally, US interest rates are expected to remain stable between 3.25-3.50%, with a potential mid-year cut to 2.25%. US inflation is projected at 2.7-3.0%, exceeding the 2% target due to trade tariffs and rising agricultural commodity costs.
Ms. Areerat Murachai, Chief Analyst of GCAP GOLD, expects the period from Chinese New Year to the second quarter to be ideal for gradually accumulating gold. She identifies key support levels at $4,600 and $4,420, which could result in Thai gold prices of 68,000-65,000 baht. Resistance levels are set at $5,400 and $6,000, with corresponding Thai gold prices of 79,000 and 86,000 baht. Ms. Murachai noted that reaching $6,000 is feasible if accelerated by potential factors such as a more substantial-than-anticipated interest rate cut by the Fed, continued weakening of the US dollar, or escalating geopolitical tensions that boost demand for safe-haven assets.