Gold likely to be volatile in first half:
$1,000 to $1,200 per ounce forecast
(Source: Bangkok Post)By Pornnalat Prachyakorn, Bangkok Post, Thailand
Dec. 2--Gold investors could still see risk, with gold prices projected to remain volatile in the first half of next year amid uncertainties over the global economic recovery, according to the gold investment company Ausiris.
Although gold prices should continue on an upward trend, high volatility is still expected due to the dramatic price increase of more than 30 percent this year, said Ausiris chief operating officer Tanasin Gleeblumjeak.
Prices of gold have gone up from about $900 per ounce at the end of last year to near the $1,200 barrier. Prices closed yesterday in Hong Kong at $1,188/89 per ounce, up from Monday's close of $1,172/73.
In the local market, the buying price for gold bars was quoted at 18,650 baht per baht-weight, an increase of 200 baht from Monday, according to the Gold Traders Association.
Mr Tanasin said that for the first half of 2010, gold remained bullish given trends towards a weaker US dollar and higher demand by central banks to hold gold as part of their reserves.
"Gold prices have risen dramatically and we have yet to really set a new fundamental price," he said. "We could see a strong fall in prices if there are more cases like Dubai World, which helped push gold prices down by $50 last Friday."
Financial markets tumbled late last week after Dubai World announced it would ask to delay payments to creditors for six months, raising concerns about the default of the state-run company's $60 billion in debt.
Mr Tanasin said gold prices in the first half of 2010 should trade between $1,000 and $1,200 per ounce, or 17,000 to 18,800 baht per baht-weight in the local market.
Ausiris chief executive Boonlert Siripatvanich said the world's financial market had increasingly taken interest in gold investment as investors see the precious metal as a wealth protection asset during the recession.
Mr Boonlert said demand for gold from central banks in Asia would continue to expand particularly in the emerging markets.
The proportion of gold in Asian central banks' reserves is now less than 5 percent when compared with more than 50 percent in the West. Thailand now holds about 1.9 percent, China 2 percent and India 6 percent.
"Fear now dominates the market and it's hard to predict what could happen in the world financial market," Mr Boonlert said. "The money that continues to invest in the gold market should be here to stay until the first half of next year."
Ausiris yesterday launched a new product, the Gold Savings Investment programme, which offers monthly investment in gold coin and gold bars.
Mr Boonlert expects that the programme will draw about 20 percent of its 8,000 client base in the first year and generate trading volume of about 200 million baht.
The import value of gold in the first 10 months this year has dropped to $2 billion when compared with $4 billion in the same period last year.
The company expects sales of gold this year of 120 to 130 tonnes compared with nearly 200 tonnes last year.
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