World Gold Price Reaches New Record High

World Gold Price has made a new record high at 2,560 USD after the trend of reducing policy interest rates of various central banks. This decision, led by the European Central Bank Board (ECB), has caused investors to turn to investing in safe assets such as gold.

However, the price of gold in Thailand has not fully adapted to the direction of the world market due to the appreciation of the baht, which is currently at its lowest point in a year and a half.

Analysts expect the baht to continue strengthening, reaching a level of 33 baht per dollar. Every 10 satang appreciation of the baht will have a negative impact on the Thai gold price of 100 baht.

Latest Gold Price Movement

As of September 13, 2024, the gold price increased for the second time at 2:06 pm, making the price of gold bars bought at 40,400 baht per baht, sold at 40,500 baht per baht, while gold jewelry was bought at 39,673.72 baht per baht, sold at 41,000 baht per baht.

Strong Baht Prevents Thai Gold from Rising Along with World Gold

Sirilak Pakotiprapa, Director of Analysis, Hua Seng Heng Gold Futures Company, stated that the price of Thai gold used to reach its highest point of 42,150 baht per baht for 36 baht per dollar. If the value of the baht remains at the same level, the price of gold may touch the level of 45,000 baht.

However, the baht strengthened to 33.33 baht per dollar, causing the price of gold in the country not to increase very much. The strengthening baht comes from two main issues: the weakening dollar and significant foreign investment flowing into the Thai stock market.

It is estimated that the value of the baht will not weaken in the short term and has a chance of strengthening to a level of 33.00 baht per dollar.

3 Tools to Hedge Exchange Rate Risks

Sirilak recommends three financial instruments for hedging against exchange rate risks:

1. USD Futures in the futures market (TFEX) or future that refers to the exchange rate of the baht to the US dollar. If the baht continues to strengthen, investors who open to sell (Short) will receive compensation from the gold price of exchange rate profit.

2. Gold Futures Online in the futures market (TFEX) or futures based on gold bars which are 99.5% pure, suitable for investors who buy and sell during the day during periods where the exchange rate is very changeable.

3. Gold Mutual Fund which moves investment unit values consistent with the movement of gold prices in the global market. The fund manager usually has some exchange rate risk protection already in place.