Traders bullish on continued momentum
YLG Bullion & Futures expects gold to preserve its upward trajectory into the fourth quarter, supported by continued central bank purchases, the global shift towards de-dollarisation, and the Federal Reserve’s moves on interest rate cuts.
The gold trader maintains its year-end target of US$4,380-4,400 per ounce, said chief executive Tipa Nawawattanasub.
China’s central bank increased its gold reserves again in October, marking 12 consecutive months of accumulation. This steady buying pattern reinforces the broader trend of sustained central bank demand worldwide — a trend closely tied to efforts to reduce reliance on the dollar, she said.
From 2022 to 2024, central banks worldwide purchased more than 1,000 tonnes of gold annually, more than double the average of 478 tonnes recorded between 2010 and 2021.
YLG also observed a shift in investor behaviour, with more savers moving out of deposits and into gold across multiple channels, including physical bars, online platforms and futures markets.
The ongoing cycle of rate cutting by the Fed also enhances gold’s appeal as a beneficiary of lower interest rates. The US central bank’s decision to end quantitative tightening (QT) on Dec 1 reinforces the broadly accommodative monetary environment, Ms Tipa noted.
“Gold remains strongly underpinned by China’s latest reserve increase, which lifted holdings to 74.09 million troy ounces in October from 74.06 million the previous month,” she said. “Short-term profit-taking may emerge following October’s steep price rally, but the broader trend remains intact.”
YLG identifies key support at $3,991 -4,015 per ounce. A sustained hold above this zone would confirm a constructive outlook. As for the domestic price, the firm sees potential for prices to climb to 67,000-67,500 baht per baht-weight, with major support at around 61,200-61,600 baht.
For investors seeking exposure during this elevated price phase, gold futures are recommended as an alternative, as futures require only 10% of the underlying value and allow profit opportunities in both rising and falling price trends, said Ms Tipa.
Hua Seng Heng noted global gold prices recently tested a key resistance level of $4,144 an ounce before retreating slightly in the short term.
Prices may pull back to test the support level of $4,100, with a possibility of rebounding afterwards. However, if gold falls below the next support at $4,075, it could signal a deeper correction, the gold trader said.
The market has begun to anticipate the Fed may shift towards a more accommodative monetary policy after ending its QT on Dec 1, leading to a weaker dollar and supporting a surge in gold prices, noted Hua Seng Heng.