She explained that the current temporary fall in gold prices is due to the possibility of the US Federal Reserve starting to cut policy interest rates in March, making the dollar more appealing to investors than gold.
However, due to the numerous uncertainties, such as geopolitical tensions, persistently high inflation, and the risk of recession, demand for gold will keep the price high.
Meanwhile, many central banks around the world continue to want to add more gold to their reserves in order to stabilise their respective countries’ fiscal budgets and as a safe haven asset.
As one of the top three gold sellers and trading services in Thailand, Pawan said that YLG continues to see a recovery in the demand for gold among Thai consumers.
“The Thai gold market is steadily expanding in terms of overall gold consumption [consumer demand], which includes both bullion and jewellery consumption. If we only look at investment in gold bars, Thailand’s overall gold consumption has ranked among the top three in Asia over the last decade (2015-2022), second only to China and India, and seventh in the world,” she pointed out.
According to YLG research, Thailand’s average gold consumption from 2015 to 2022 was 63 tonnes. Despite a significant drop in gold demand during the Covid-19 pandemic, Thailand’s overall gold consumption recovered to 37 and 38 tonnes in 2021-2022 respectively.
“We [YLG] view the direction of gold’s movement in 2024 as still upward. Although in the short term there may be a correction after the price rose quite a lot at the beginning of the year. But the medium-term picture is still showing an upswing. Therefore, it is seen that this whole year there will be an opportunity to reach a new high of US$2,300 per troy ounce,” she said.