YLG Urges Gold Investment as Baht Weakens
YLG expects the weakening baht to support Thai gold prices in the second half of 2024, recommending dollar-denominated gold to capture both foreign exchange gains and potential price recovery as global gold remains pressured.
YLG forecasts continued baht weakness in the second half of 2024 due to lingering U.S. Federal Reserve rate uncertainty and high global oil prices, which should keep Thai gold prices buoyed despite weakness in global gold markets. YLG CEO Pawun Vavattanasopit noted that global gold (Gold Spot) has fallen 5.12% year-to-date, from $4,318.27 per troy ounce at the start of 2024 to $4,098.15 on July 10, while domestic gold in baht has risen 0.54% from 64,450 baht per gram to approximately 64,750 baht, thanks to baht depreciation offsetting global gold weakness.
In the second half of the year, the baht is expected to remain weak despite typical year-end tourism season strength, as Fed rate uncertainty and high oil prices supporting dollar demand outweigh seasonal factors. YLG recommends investors in dollar-denominated gold benefit from two sources of profit: foreign exchange gains as dollar assets appreciate in baht terms, and potential capital appreciation if global gold prices recover. Investors holding baht-denominated gold alone would miss out on the significant foreign exchange gains available to those holding gold in U.S. dollars.
