Retail Gold Prices to Hit 100-year High

Local retail gold prices have hit an all-time high of more than 12,900 baht per one-baht weight (15.16 gram) of ornamental gold.

Prices are now at their highest point in more than 100 years, driven up by global gold prices, which this week rose to a 25-year high of more than US$700 per ounce, according to the Gold Traders' Association.

''The local retail prices of ornamental gold yesterday raised to a historic high for more than a century, since the kingdom officially began recording gold trading prices,'' said Mr Pichaya Phisuthikul, the association's secretary-general.  

''The price is set to rise further, probably to above 13,000 baht this year and 15,000 baht over the next two years, if the current situation continues and international hedge funds keep on building up their gold portfolios.''

Spot gold yesterday rose as high as US$702.10 an ounce, up from around US$500 at the end of 2005 and compared with less than US$300 at the start of the decade.

Gold has risen more than 35% this year as investors diversified into precious metals as a hedge against global tensions, including over Iran's nuclear ambitions, rising energy costs and uncertainty about the dollar's outlook.

Mr Pichaya said gold was likely to continue to be seen as a safe bet as oil prices stay high and the dollar remains weak.

''We recommend the purchase of gold bars as a long-term savings vehicle. Retail gold prices are unlikely to drop to below 10,000 baht if oil prices remain at around US$60 per barrel.''

Source: BKP

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