Gold unlikely to hit $2,000 this year, investment firm says
It won't be easy for the price of bullion gold in spot market to touch US$2,000 per ounce this year as targeted previously unless there is a third round of monetary easing by the United States, according to MTS Gold of the Mae Thong Suk Group.
President Kritcharat Hirun said yesterday that many analysts had predicted that the gold price was unlikely reach last year’s peak, seen in August, of $1,930 per ounce. The main reasons are such developments as improvements in the US economy and the European Union debt crisis and lower consumption of gold in India due to possible higher import tariffs.
"So we have little chance of seeing the gold price surging to Bt30,000 per baht weight," he said, adding that fund inflows were now mostly seeking higher gains in stock and bond markets instead of gold.
He said the gold price was now on an upward trend for the short term. But it is in a sideways-up cycle in the long term, as it is believed that China will increase its gold reserves. Russia has also allocated more of its reserves in the form of gold. Currently, gold accounts for only 2.9 per cent of China’s total reserves, while the United States’ gold reserve is as high as 70 per cent and Germany’s 40-50 per cent.
In addition, the US general election in November might affect movement of the dollar. Currently, the dollar has correlation with the gold price. If the dollar rises against other major currencies, the gold price will also rise, Kritcharat said.
As a market leader in gold investment, MTS Gold yesterday announced the launch of a new service that allows investors to trade gold online nationwide, and introduced five major goldsmith shops as its agents.
Kritcharat said the company expected the new service, on which it has spent about Bt20 million for development of its information-technology system over the past years, to boost its gold sales this year by 50 per cent to Bt600 billion.
He said the MTS Gold Network was customised specifically for each gold shop to enhance their trading via the Internet rather than old-fashioned shop-based transactions. The company plans to find 20 more partners by the end of the year.
The five agents announced yesterday, all among the top three gold sellers in the selected provinces, are In-See-Thong Goldsmith Shop in Chiang Mai, Sudjaphon Goldsmith Shop in Chanthaburi, Somnuek Goldsmith Shop in Nakhon Pathom, Phet Rung Rueng Goldsmith Shop in Nakhon Sawan, and Yaowarat Subsomboon Goldsmith Shop on Rama II in Bangkok.
