BANGKOK, Oct 17 – Thai investors have been warned of expected volatility in the global capital market as the credit rating of US bonds and financial instruments will possibly be cut.
Ekniti Nitithanprapas, deputy director general of the Fiscal Policy Office, said the US should be successful in expanding the debt ceiling but the move would impact its credit rating.
Foreign capital may flow out of newly-emerged countries including Thailand, he said.
He said the US government shutdown for 15 days, which was longer than predicted, could shrink the US economy by 0.1 per cent per week, and its economic growth in Q4 would be less than projected.
The US economic stimulus through quantitative easing measures may not be downsized until next year, he said.
Kritcharat Hirunyasiri, president of MTS Gold Mae Thong Suk Group, said the gold price would continue to decline and it could plunge to US$1,100 per ounce, or about Bt16,000 per baht weight, next year if the situation worsens.
However, it would not slide below US$1,000 per ounce – the rate purchased by China in a huge lot as reserves, he said, predicting that gold could fall to US$1,180 per ounce in the near term – the lowest for this year.
The US expansion of debt ceiling and QE tapering would pose a negative impact on gold price while investors interested in long-term investment should hold the bullion for at least three years when it could spring back to US$1,300 per ounce or Bt26,000 per baht weight, he said.
Gold price slid 20 per cent this year from Bt24,000 to Bt18,900 per baht weight.
