At the beginning of last year, it is considered a phenomenon that does not occur often in the trading market. Invest in gold when gold price There were severe fluctuations. The price ranged from 33,000 baht/baht gold at the beginning of the year to a high point of 42,000 baht/baht gold in just under two months, and more importantly we are starting to see a picture of standing solidly above the 40,000 baht/baht price of gold throughout the first half of the year.
The question many people are asking is: Is this the new norm for gold prices? Or is it ultimately a short-term increase in gold prices? There may be a sharp drop below 40,000 baht/gold baht again in this article. Inter Gold I will invite you to find the answer together.
Analysts from Intergold believe that the second half of the year will be a very difficult period for gold prices and gold investors. Although there are good signs of this before the end of the year Federal Reserve Bank (The Fed) will cut interest rates at least once, but we have to guess in the market whether 1-2 cuts is too little or not. If the road comes out too small and economic inflation We have not yet published the gold price, it is possible that it will be destroyed. But if the market sees that a 1-2 times reduction is appropriate, the gold price can maintain its base at 40,000 baht/gold and continue to rise without difficulty as well.
Things to watch out for in the second half of 2024
1. US interest rate factors
This factor and it would not be wrong to say that this is the most important factor. In addition to the impact gold price It also affects money flows around the world, or simply put, assets around the world move up and down in line with US interest rates. This is the factor that investors should adhere to because it is the easiest to follow.
This is because the interest rate policy will be announced as a forecast number. The last one is in June. What is known first is that interest rates remain stable at 5.25 – 5.5% and there is no rate cut. But the Fed came out to forecast interest rates through the economic forecast or Fed Dot Plot, which makes it possible to know that before the end of 2024 the interest rate will be around 5.1%, which means that the Fed will cut interest rates only once. This year
Very different from March. Because the Fed's forecast at the time was 4.8%, this means the Fed will have to cut interest rates at least three times this year. But the end-of-year interest rate outlook is very different. However, it is definitely not good for gold. Resulting in a rise in gold prices in the second half of the year is not supported by big news such as interest rates as was the case in the first half of the year. From this first factor, it appears that gold in the second half of the year may not be so exciting.
2. Inflation trends
economic inflation It is a number that the Federal Reserve (Fed) uses to implement interest rate policy. We have seen inflation gradually decline, but not as much as the Fed would like. This makes the Fed’s stance or Fed expectations appear as concerns that inflation will rise if interest rates are lowered too quickly. Therefore, the inflation numbers that are released every two weeks of the month are the ones that investors, both short-term and long-term, should follow.
3. American elections
Perhaps the most dangerous factor in the second half of this year is inevitable. American Elections Because of the Fed's path of interest rate cuts, people in the market saw the rough outlines. Then according to point 1
The market must be able to prepare a plan to deal with any changes. But the US elections are what raises concern. Because in the recent past and if there was a shift to the Republican side, the majority gold price They are often pressured and the stock market will get positive results.
This election is being led by Mr. Donald Trump, who has been in the gold industry long enough? It is perhaps best known that Trump won elections in the past which led to a sharp decline in gold prices with his “Make America Great Again” policy, which is a very pro-American policy. Because in the past politicians came in the form of world peace, world peace. It is the world government that solves problems or mediates when conflicts arise. But when Trump came late, he didn't care. Let's take the American people first. Earn money that should be spent on creating world peace. It has been used more in the country. This was part of the issue of the American economy during that period. The stock market is rising because everyone believes that the United States spent money in the right place.
4. Is the gold discount in China a game or a reality?
Another trend halted gold's recent rally mid-year. Perhaps there is no escape from the news that China has stopped buying gold to use as reserves. This news comes at a time when gold prices have begun to slow. From a strong rise becoming a trend some things started to sell off. When the news came out that China had stopped buying gold, there were almost no positive factors left for gold at this time.
The result is gold price He started to rest and ran out to the side in the frame. 40,000-41,000 baht/baht of gold or if spot gold price, it is $2,275-2,350.
The above is something that has already happened. But if we analyze it in terms of financial games, there is a high possibility that China will try to lower the price of gold. Or at least sell for profit in this area. If it is really a financial game, seeing gold at just $100 is very little. If China wants to adjust the cost of buying gold or really wants to crush gold. Spoons are at low prices, the numbers are likely to be in the $200-$300 range. This means that the target for gold to actually stabilize may be $2,100-2,200 or the range of 37,000-38,500 baht/gold would be a good point to buy Chinese gold or start buying Chinese gold again. This is just the author's personal opinion.
From all this it becomes clear that in the second half of the year there were no positive factors. With the rise in the price of gold we will not talk about the risk of war. There will be a financial crisis. Because this already has a chance to happen. But we do not know when it will happen. This makes investors look at risks that have not yet happened as something to worry about. Holding gold at any price level is something you should keep in your investment portfolio. But if asked about the timing
It can be said that before the end of this year or from the sixth month to the ninth month is not the time when gold returns to a strong upward trend again at a level exceeding 2400++ or above 42,000 baht/baht of gold or more. Perhaps we will not see that soon as for the issue of stillness. gold price The target for accommodation is around 40,000 Baht/Golden Baht and the minimum should be around 38,000 Baht/Golden Baht However the price range of 40,000 Baht is considered a good price for medium to long term investors.
Author: Sithawat Photip, Gold Analyst, Intergold Gold Trade Co., Ltd.
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