Gold to continue rally

By THE NATION

Local gold prices could set a new record high of Bt19,500-Bt20,500 per baht weight (15.4 grams) in the first half of next year, thanks to continued demand from jewellery makers and Chinese New Year, according to Globlex Holding Management.

Parkpoom Pakvisal, managing director of GBX, said yesterday that much of the demand will come from China and India, which consume 400 and 800 tonnes a year.

In the first half, global gold prices could hit US$1,250-$1,300 per ounce, before sliding in the latter half on expectation that the United States will tighten monetary policy.

The bottom price is estimated at $1,000-$1,050 per ounce, or about Bt15,500-Bt16,500 per baht in the local market.

Globlex suggested investors allocate 20-30 per cent of their investment portfolio for speculative purposes.

Investors should also closely monitor global economic indicators and the US dollar, for prompt portfolio adjustment.

If the dollar is heading up, there is a good chance that gold, having been the safe haven during dollar declines, could fall. If so, it would present a good chance for long-term investment.

"Analysts expect that the US policy rate will stay in the low range of 0-0.25 per cent until late 2010. A sign of a significant rate increase could be seen in the third quarter.

"The US dollar has so far been under pressure, as several central banks unwind dollar reserves for gold. The recent appreciation could be temporary. As such, gold remains the tool for saving, investment and speculation," he said.

This year, gold bullion prices rose 30 per cent, touching $1,126.37, or Bt19,200 per baht for the first time.

As the stock market was hit by political turbulence and the Map Ta Phut fiasco, several investors turned to gold bullion and gold futures.

Gold futures trading recently reached 5,000 contracts a day, compared to 500 contracts earlier.

-- The Nation 2009/12/29

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