COMMODITIES
Local gold prices opened sharply lower yesterday in line with world prices, a result of speculation in gold futures by global fund managers.
The Gold Traders Association (GTA) announced the buying prices of 21,724.28 baht per baht-weight (15.16 grammes) for gold ornaments and 22,050 baht per baht-weight for gold bars after the market open. Selling prices were set at 22,550 baht for gold ornaments and 22,150 baht for gold bars.
The gold price fell by 550 baht per baht-weight from Wednesday's close.
Gold prices have declined since the beginning of the year. World prices averaged US$1,644.13 an ounce in the first three weeks of February compared with $1,672.57 in January.
The US Federal Reserve's meeting minutes hinted that it may slow down the third round of quantitative easing (QE), a scheme that has pumped money into the markets through treasury purchases. The news sent jitters through high-risk asset markets, especially gold and stocks.
GTA president Jitti Tangsithpakdi said local gold prices are expected to fall further as buyers take short-term profits before prices recover.
Short-term investors can also buy the precious metal and sell it when the price rebounds, he said.
"For short-term speculation, investors should wait and see for a few days," said Mr Jitti.
"The global gold price could drop to as low as $1,545 an ounce, down from $1,562 now. If it cannot stay at $1,545, there is another resistance line at $1,500."
Mr Jitti said speculation in precious metals by fund managers has had a greater effect on gold prices than the debate over whether QE should continue.
Gold prices should still rise in the long term, he said.
Even though global investors shifted their interest to stocks and oil after the last round of QE began, Mr Jitti voiced confidence that gold will remain a key asset for accumulation by central banks worldwide.
He advised local investors with "cool" money to set aside a portion of their portfolio for a long-term investment in gold.
Kritcharat Hirunyasiri, the president of MTS Gold Futures Co, expects short-term gold prices to fall to $1,550 an ounce as a support level.
Daily speculation and price volatility will remain risks for existing investors, he said.
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Article source: http://www.thethailandlinks.com/2013/02/22/gold-dips-on-hints-of-qe-slowdown/
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