Gold rebound faces further volatility

Investors are cautioned against hastily investing in gold for short-term speculative gains, as prices are anticipated to remain highly volatile due to ongoing Middle Eastern conflicts and potential Federal Reserve interest rate hikes, warns the Gold Traders Association (GTA). GTA president Jitti Tangsithpakdi stated that the main driver of gold prices is currently geopolitical tensions, which are impacting oil prices and global inflation risks.

If the Federal Reserve raises rates next month, gold prices could decline again, potentially reaching this year's low of $3,880 an ounce. Domestic gold prices might also fall to 62,800-62,900 baht per ounce from the current 64,000 baht, according to Jitti. Despite recent gains, gold has slipped nearly 30% from its January record high of around $5,600 an ounce.

Jitti advises that gold investments should be viewed as a long-term commitment, with spare cash being the ideal investment amount. Short-term investors are urged to exercise caution due to the high volatility and potential for further declines. Long-term, Jitti anticipates gold to resume its upward trend next year, possibly reaching a new domestic record of 80,000 baht per ounce, but this will depend on US interest rate movements and geopolitical developments, including the Russia-Ukraine conflict.