Thailand’s gold price sentiment remains shaky

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BANGKOK, May 8 – The gold price sentiment index in the Thai market dropped from 52.84 points in April to 45.50 points this month, reflecting negative confidence among investors, a gold analyst said today.

Pusit Wonglohsaichon, Gold Research Centre (GRC) director, said the index has been below 50 points since last month’s major gold sell-off.

Investors are pessimistic that the gold sentiment index will tumble to 43.54 points but traders are optimistic that it will rebound in the short term to 57.52 points.

The baht value, European debt crisis and the dollar movement will all have an impact on the gold price, he said, adding that gold traders wanted to see a stable Thai currency.

It is the first time that investors and traders share different views on this month’s gold price index, he indicated.

Traders believe that there is a demand for gold, especially gold ornaments, which have been selling well, while most investors are not convinced that the gold price will climb up.

In the past month, nearly one-third — 31.85 per cent — declined to buy gold, while slightly over one quarter — 26.20 per cent – hesitated, and two-fifths — 41.95 per cent — said they would buy the yellow metal, Mr Pusit said.

Both traders and investors are confident that the gold price index will be higher in the next three months despite declining confidence to 65.06 points in April and 56.72 points this month.

Kamolthan Paisalvichit, GRC co-director, said gold traders believed that the price movement this month would be similar to last month’s.

The majority predicted the gold value at US$1,480-1,560 per ounce at the highest and US$1,300-1,440 per ounce at the lowest.

Those surveyed by the GRC believed that the domestic gold price will be between Bt20,500-21,900 per baht weight while factors that will affect the gold price in the next month is the baht value, the European debt crisis, dollar speculations and the demand for gold.

It is unlikely that the gold price will slide down to US$1,700-1,750 per ounce as investors have shifted to invest in the stock market which delivers higher yields, he said.