Thai investors’ confidence in gold spirals downward


BANGKOK, June 11 – Thai gold investors and traders have slashed their gold investment ratio to only 22.31 per cent this year, while this month’s gold price sentiment index is 32.91, far below the standard 50 points, analysts said today.

Pusit Wonglorsaichon, Gold Reseach Centre (GRC) director, said a survey of 456 gold investors and 119 traders found an unfavourable sentiment with slightly more than two-thirds — 67.5 per cent — strongly believing that this year’s domestic gold investment will be lower than 20 per cent of total investment.

Among the 456 respondents, 17 per cent said they would probably not invest in gold given uncertainty and their lack of confidence in gold prices after eight spiralling months in a row.

This year’s gold investment ratio was 12 per cent lower than last year’s with 77.7 per cent of investors switching to invest in other assets including bonds and stocks, while some carry cash, he said.

Gold traders suggested that investment in the yellow metal should not exceed 20 per cent of one’s portfolio.

Kamolthan Pornpaisalvichit, GRC co-director, said the June’s gold price sentiment index at 32.9 was a decline from May’s index at 45.50.

The sentiment index for the next three months remains grim at below 50 points, he said, adding that the sentiment indices in the last four months were 75.72 in February, 65.06 in March, 56.72 in April and 46.25 in May.

In the second half of this year, Mr Kamolthan said, gold prices may scale up, though rather difficult, to the resistant at US$1,500-1,520 per ounce, or fall to the support at US$1,250-1,300 per ounce.

In the local market, gold price movement should be around Bt19,000-21,500 per baht weight under an assumed currency exchange at Bt30.07 against the dollar.

Risk factors for gold price are weakened baht, policy interest rate cut and a reduced quantitative easing by the US, he said, indicating that gold price will possibly drop again if the US Federal Reserve trims down its economic stimulation.

SPDR Gold Shares, one of the top ten largest holders of gold in the world, reduced its holdings of gold bullion from 1,350 tonnes to 1,013 tonnes in the first five months of this year, he said.