Plunging prices and the prospect of higher U.S. interest rates has sparked speculation in the local gold market, said the head of the Pattaya-Naklua Gold Business Club.
Pattaya City Councilman Banjong Banthoonprayuk, who is also president of the gold club, said the sales market has been active due to some companies buying gold to give as bonuses to their employees and because the price has dropped to a six-year low, now bobbing under 18,000 baht for one baht-weight (15.2 grams).
Plunging prices and the prospect of higher U.S. interest rates has sparked speculation in the local gold market.
Demand for monkey-shaped gold ornaments been high, as next year is the Year of the Monkey on the Chinese zodiac calendar.
While the overall sales volume this year has been down due to Thailand’s slow economy, the popular – but unproven – belief that a U.S. Federal Reserve interest-rate increase this week would have a bearish impact on the gold market spurred some speculative buying.
While economists say there has been only a 28 percent correlation between gold prices and interest rates since 1975, Banjong said he expected gold prices to range between $1,050-$1,085 per U.S. ounce.
Gold closed in New York on Dec. 11 at $1,074.08 per ounce. In Bangkok on the same day gold bars sold for 18,300 baht and ornaments at 18,040 baht per baht-weight.
