Association anticipates gold price hitting $3,000 in Q1
Fri Dec 27 2024
Gold prices could hit US$3,000 an ounce by the first quarter of next year as Donald Trump's return to the White House on Jan 20 will put the global economy on the verge of turmoil, stimulating demand for safe haven assets, notably bullion, says the Gold Traders Association (GTA).
Bullion was traded at $2,627 an ounce in Asian morning trade on Thursday, up 0.5% from the previous session, boosted by US dollar weakness and heightened geopolitical tensions. Investors also digested the latest US consumer confidence, which unexpectedly sank amid uncertainty around the policies of the incoming Trump administration.
Locally, the price surged by 150 baht per baht-weight to 42,550. Gold has hit successive records this year and is set to close 2024 more than 27% higher. Prices have been lifted by US monetary easing and buying by central banks, but the rally recently slowed as the dollar strengthened after Trump won the presidential election.
Lower borrowing costs are typically positive for bullion, which does not pay interest. GTA president Jitti Tangsithpakdi said the recent easing of gold prices was driven by speculation.
"But the price will surge next year as Trump could cause turmoil to the global economy, including the US where the higher import tariffs announced by the incoming president would cause product prices to rise," he told the Bangkok Post. "Consequently, demand for gold, which is a safe haven asset, will soar to hit $3,000 an ounce within the first quarter," noted Mr Jitti, adding that the Chinese central bank, which previously stopped buying gold as a reserve for six months, resumed gold purchases recently.
Chutikarn Santimetvirul, assistant director of securities analysis at Phillip Securities, said gold prices eased recently as investors remained uncertain about the Federal Reserve's monetary policy.
Previously, the US central bank expected to cut its policy rates four times next year but following a cut of 25 basis points on Dec 18, it projected a reduction in cuts to only two, causing the dollar index and US bond yields to rise. "The US economy continues to expand well so there is no need to cut the rates a lot in 2025," said Ms Chutikarn.
The brokerage now projects gold will have a resistance of $2,650 an ounce by the year-end and support at $2,580-2,600, she added.
Source: https://www.bangkokpost.com/