Domestic gold prices head for new high

Domestic gold prices are on course to surpass the previous high of 42,150 baht per baht-weight (15.2 grammes) as global prices stayed near an all-time high, approaching $2,700 an ounce, say local traders.
Domestic prices surged 200 baht to 41,100 baht for gold bar early Wednesday as bullion gained 0.3% to top $2,665 an ounce, eclipsing the previous record posted on Tuesday following a report showing US consumer confidence this month fell the most in three years.
Heightened geopolitical conflicts as Israeli airstrikes in Beirut killed a senior Hezbollah commander on Tuesday have also driven demand for safe-haven assets, including gold.
China’s recent stimulus measures to improve its flagging economy, including interest rate cuts, have also helped the precious metal.  
Gold has surged almost 30% this year, while silver has risen 35%, with the rallies gaining momentum after the US Federal Reserve’s rate cut of 50 basis points (bps) last week.
Traders have increased bets for at least another 75bps of rate reductions by the US central bank year-end.
Lower rates tend to benefit both gold and silver as they don’t offer interest, while a weaker dollar makes the metals cheaper for buyers holding other currencies.
Jitti Tangsithpakdi, president of the Gold Traders Association, said global prices are expected to hit $2,700 in the fourth quarter, as the Fed has sent clear signals of at least a 50bps cut at the remaining two meetings this year, and another 100 basis points next year.
“Domestic prices have been pressured by the strong baht,” he said.
“But when the global price hits $2,700 an ounce, we’ll probably see domestic prices topping the previous high of 42,150 baht per baht weight.”
The Thai currency, supported by foreign inflows, political stability and gold prices hitting record highs, has gained 4.6% this year, making it one of the top performers in Southeast Asia.
The baht has appreciated continuously, gaining 0.30 baht to the dollar to 32.63, causing domestic prices of gold to increase by only 200 baht, while global spot prices surged as much as $30 an ounce.
The local trader MTS Gold sees support for world gold prices at $2,645, with resistance at $2,675. It puts the local support at 40,800 baht and resistance at 41,200 baht.
YLG Bullion and Futures anticipates global prices to hit $3,000 in 2025, after finishing at $2,700 this year, pushing domestic prices to a range between 42,400 and 47,000 baht per baht weight.