Mr Jitti said gold prices are expected to decline further as continued attacks in the Middle East fuel expectations of tighter monetary policy to curb rising inflation.
Global gold prices could drop to US$4,200 an ounce in this cycle, translating to a domestic price of around 66,000 baht, as the market has begun pricing in the possibility of a Federal Reserve interest rate hike in the second half of the year amid rising US inflation, says the Gold Traders Association (GTA).Jitti Tangsithpakdi, president of the GTA, said bullion had fallen by $100 as of midday yesterday to a two-month low of $4,387 an ounce following three consecutive days of declines.
Recent US attacks on Iran pushed oil prices higher, stoking concerns over rising inflation and clouding the interest rate outlook.
"Gold prices dipped as attacks in the Middle East continued, prompting expectations of tighter monetary policy to curb rising inflation," he told the Bangkok Post.
With no clear end in sight to the war in Iran, the market expects energy-driven inflation to prompt the Fed to raise its benchmark interest rate by 25 basis points later this year.
