Gold Rush Ahead: 4Q24 Price Surge Predicted as Interest Rates Take a Dive

In 2024, the price of gold has increased to an all-time high more than 30 times, which poses challenges for investors. Demand in the consumer sector But we still need to keep a close eye on the economic growth trend. Because it can lead to a change in the trend direction of gold.

Regarding the guidance for the US central banks and Thai interest rate reductions, which are expected to continue. It is seen that changes in interest rate policies that occur around the world are likely to increase interest in investing in gold. This is because the opportunity cost of holding gold has fallen. We believe that this trend is likely to occur in the United States and in Thailand.

Although central bank gold purchases slowed in 3Q24, cumulative purchases throughout the year remained strong. The net purchase volume in the third quarter was 186 tonnes, bringing the total cumulative purchases for the whole year to 694 tonnes, which is lower than the figure in 2023 but still at a similar level to the same period in 2022.

Continued higher gold prices may prevent some central banks from buying further gold. and encourage some banks to sell gold bought from domestic producers into the market. Market data also suggests that outright gold purchases have slowed this quarter. Although it is still at a high level.

Currently, they expect the central bank to maintain positive net purchases in 2024, but full-year totals could be lower than two years ago.

Although the gold jewelery market in Thailand is seen to be still strong compared to other countries. in the ASEAN group Regarding the demand for gold for investment Thailand’s demand for gold ETFs along with gold bars and coins has been supported by geopolitical tensions. Domestic political and economic concerns

Including predictions that the price of gold will soar. This is driving the demand for gold among investors in Thailand. Including ASEAN countries in the third quarter, Thailand, Indonesia, and Malaysia all had double-digit growth compared to last year. Meanwhile, in Vietnam, demand has fallen. This is because the rapid increase in prices leads to a decrease in purchases.

China stimulates economy to support gold demand

As for China, in the past 3Q24 China had the lowest demand for gold jewelery since 2010, which was 36% below the 10-year average, with high domestic gold prices driving demand down similar to the second quarter, along with low consumer confidence and slow economic growth

In terms of investing in Chinese gold bars and gold coins, the division found that it started to slow down in the third quarter after a strong first half, but with very high base numbers last year. Annual comparisons can make the slowdown appear more dramatic than it really is. Because if we consider the long term, we still find that the level of demand is still very strong. The amount accumulated since the beginning of the year (YTD) is still at the strongest level since 2013.

However, with the recent announcement of a temporary suspension in gold purchases by the People’s Bank of China (PBoC), it is believed that this may cause the overall demand for investment in gold to decrease in some quarters. But the department expects a slight increase in 4Q24 due to further reductions in domestic interest rates. and measures to stimulate the government’s economic growth It should have a positive effect on the purchase of gold bars and gold coins in the next quarters in 2025.