Gold set for robust growth amidst global uncertainties

 

Financial markets analysts are painting an optimistic picture for gold in 2025, with major financial institutions projecting significant price increases for the precious metal. 

 

This comes as Thailand's gold market continues to demonstrate remarkable resilience, building upon its strong performance in 2024.

 

 

 

          Thai market’s promising trajectory

Thailand's gold market, which recorded the highest growth among ASEAN countries for two consecutive quarters in 2024, continues to play a vital role in the nation's financial landscape. 

 

The market witnessed a notable surge, with prices climbing from 42,650 baht per baht weight (15 grams) at the start of 2024 to an impressive 46,000 baht by year's end.

 

 

Andrew Naylor, head of Middle East and Public Policy at the World Gold Council, emphasised gold's unique position in Thai society: "Gold remains deeply ingrained in Thai life, serving both as a cultural touchstone and a crucial instrument for financial inclusion."

 

 

          Global outlook for 2025

In their bullish forecasts for 2025, leading financial institutions are projecting significant increases in gold prices. Goldman Sachs and Bank of America estimate that prices could rise to around $2,900 to $3,000 per ounce. Meanwhile, InvestingHaven proposes a more ambitious target of $3,275. The most optimistic outlook comes from IG Bank, which suggests that under favourable conditions, gold prices might even reach as high as $3,300.
 

 

 

 

Several key factors are expected to influence gold prices throughout 2025.

• Central bank demand: Asian central banks, in particular, continue to demonstrate strong appetite for gold purchases, reinforcing its status as a reserve asset.

 

• Geopolitical landscape: Ongoing global tensions and trade disputes are likely to enhance gold's appeal as a safe-haven asset.

 

• Economic uncertainties: Concerns about global economic stability and inflation continue to drive investors towards gold as a hedge against market volatility.

 

 

 

          Thailand's digital gold innovation

Thailand's forward-thinking approach to gold trading has yielded impressive results. The government's initiative to allow gold bullion traders to offer digital gold savings and trading through the “Pao Tang” mobile application has modernised the market. Early 2023 saw the value of online gold savings surge by 60-70% year on year, with YLG Bullion International reporting a 70% increase in new trading accounts.

 

 

          Financial inclusion

The precious metal continues to play a crucial role in Thailand's financial inclusion efforts. With bank account penetration at 95.6%, significantly above the global average of 77%, Thailand has demonstrated remarkable progress in financial accessibility. However, credit service access remains relatively low at 30.4%, below the APEC average of 38.2%.
 

 

 

 

          Market experts' perspective

The World Gold Council maintains a cautiously optimistic outlook, noting that while central bank demand and geopolitical risks will continue to support prices, higher interest rates could present challenges. 

 

They particularly highlight the significance of Asian markets, with China and India expected to remain dominant forces in global gold demand.

 

 

 

          Looking ahead

As 2025 unfolds, the gold market appears poised for continued growth, although experts advise investors to monitor geopolitical developments and central bank activities closely. 

 

The combination of traditional cultural significance and modern financial innovation positions Thailand's gold market uniquely within the global landscape, potentially offering both stability and growth opportunities in an uncertain economic environment.