Gold Confidence Index plummets as Fed indicates benchmark hike this year

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BANGKOK, 10 June 2015, The Gold Confidence Index crashed this month, as the US Federal Reserve signals a looming benchmark rate hike. However, the baht’s depreciation could pare down gold prices, with forecast lows of 18,000 – 19,000 baht per baht weight.

Director of the Gold Research Centre Kamolthun Pornphaisarnvichit revealed that the Gold Confidence Index of June has contracted, ending two months of growth. The index decreased by 10.0 points to 43.11.

Below 50 indicates pessimism, and above 50 indicates optimism. While reflecting the negative gold trade climate, Mr. Kamolthun believed the index was within an acceptable range.

A survey revealed that respondents believe the strongest negative factor of gold prices is the appreciation of the US dollar. The Fed has indicated that a benchmark rate hike will come within the year.

Correnspondingly, survey respondents believe the strongest positive factor is the depreciation of the Thai baht. The currency is expected to continue to inflate in the near future.

The proportion of respondents saying they would purchase gold within the next 30 days has decreased from 40 percent in May to 27 percent this month.