US interest rate policy could bring prices of gold down in the short term

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.

However, in order to encourage more Thais, particularly the younger generation, to enter the gold trade market, the YLG CEO noted that the company intends to provide more products and services through applications and other online channels, as well as expand its strategic partnerships, such as the one with Krungthai Bank via Gold Wallet on Paotang application.

"After YLG worked with Krungthai to launch the Gold Wallet service on the Paotang app, it was discovered that it could help increase the proportion of new generation investors who have more access to investing in gold. Especially among people under the age of 40, where the proportion was around 40% in 2022 but has recently risen to nearly 60%. The number indicates that the Gold wallet service has significantly contributed to the new generation of investors' access to investments," she said.

Furthermore, due to the US Federal Reserve’s likely policy of lowering the interest rate and this improved direction, it is expected that more users will use the Paotang app's Gold Wallet by 2024.

YLG recently launched online investments through the Get Gold app for beginners to trade in gold. It is the first Thai application to increase the level of investment in gold, with gold trading in five currencies: the US dollar, yuan, Singapore dollar, euro and baht.

Rawin Boonyanusasna, Krungthai's head of global markets, said that the partnership with YLG and two other gold trade providers could assist Krungthai's Paotang app ecosystem to grow beyond being just an e-payment and e-wallet app.

By sharing its user base with YLG, he said that the Paotang app would gain access to Thai investors as new base users, allowing Paotang to become the country's super app and assisting the bank in providing other investment products to cover all types of assets.

Krungthai is one of Thailand's leading commercial banks.