InfoQuest, (July 10, 2019) -- Mr. Phibun Ritwiriyaphon, director of Thailand's Gold Research Center, revealed the confidence index of gold price in July 2019, which rises to 56.20 from 52.60 in June, up 3.60 points or 6.84 percent. The rise is caused by global economic uncertainties, baht devaluation, trade war, and demand for safe assets.
In the coming three months, namely the third quarter of 2019 (July-September), the confidence index of gold price will rise to 58.18 from 47.79 in the second quarter, up 10.39 points or 21.74 percent, which shows the positive attitude of investors over the trend of gold price in the next three months. The main determinants include: investors predicting a greater demand for safe assets, capital flight in the form of U.S. dollar, trade war, inflation, and a sluggish baht.
As for the prediction of gold price in July 2019, major gold dealers believe that the average spot price of gold is 1,363-1,458 U.S. dollar/ounce. In Thailand, the price of gold bar with purity 96.5 percent is 20,000-21,000 baht/baht-weight. The exchange rate between baht and U.S. dollar is one U.S. dollar=30.24-31.16 baht.
As for gold investment in July 2019, major gold dealers believe that the over-purchasing in the past month, caused by fast rise of gold price, may lead to greater pressure of underselling and drive down gold price further; yet if underselling is not serious and gold price fluctuates at a level higher than 1,381 U.S. dollar/ounce, positive impact will be there for gold price; it is estimated that gold price can test the resistance level of 1,439-1,461 U.S. dollars.
Further attention should be paid to the following determinants:
1. US-EU trade conflict. The Office of the United States Trade Representative issued an announcement, suggesting that higher tariff should be imposed on 4 billion U.S. dollars of EU goods exported to the US. The announcement was made after US and China resumed trade negotiations.
2. Federal Reserve System (FED).
After the US Department of Labor announced in June that non-agricultural employment data were higher than expectation, market investors have been waiting for interest rate signal of Federal Reserve. In July, Federal Reserve will release semi-annual monetary policy report in U.S. House of Representatives Financial Services Committee, and then submit the report to the US Senate Banking Committee.
3. Tension between US and Iran.
After the Gulf of Oman tanker attack, the US blamed Iran as the manipulator behind the scene, and Iran denied it. Since then, investors have been worried about the tension between US and Iran.
4. UK politics.
As for the latest UK politics, Boris Johnson scored overwhelming victory in the leadership election of Conservative Party, becoming the most popular candidate to replace Theresa May, the Prime Minister.
Source: InfoQuest, by Nisarat Wichiensri / Rachada, translated by Xinhua Silk Road
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A single purchase
