Gold Prices and Global Uncertainty: Insights from Mr. Jitti Tangsitpakdee, President of Thailand's Gold Traders' Association

n an exclusive interview, Mr. Jitti Tangsitpakdee, President of the Gold Traders' Association of Thailand, shared valuable insights on the key factors influencing gold prices and how global economic policies impact the Thai gold market. With prices surging over the past years, the conversation sheds light on the intricate relationship between geopolitical events, inflation, and investor sentiment.

Over the past eight years, gold prices have been on an upward trajectory, driven by financial instability among major U.S. banks and increasing global demand for safe-haven assets. Last year alone, gold prices rose by approximately 30%, a movement largely attributed to central banks across various nations boosting their gold reserves. However, as the year progressed, the market reacted to Donald Trump's election victory, causing prices to decline due to expectations of economic policy shifts. Currently, the gold price in Thailand stands at 44,150 baht per baht-weight, nearing last year’s peak of 44,550 baht.

Mr. Jitti highlighted that one of the most significant drivers of gold prices is U.S. economic policy. Trump’s protectionist stance, particularly his pledge to increase tariffs on Chinese imports, has introduced market volatility. If these tariffs materialize, global trade could suffer, leading to inflation. In such scenarios, investors often turn to gold as a hedge against economic uncertainty. Moreover, central banks may further increase gold reserves, pushing prices even higher.

During the interview, Mr. Jitti provided deeper insights into these concerns:

“If the global economy remains unstable, we could see a new high for gold prices. Investors are looking for safe-haven assets amid concerns about inflation and geopolitical tensions,” he explained. “In Thailand, we must monitor key economic indicators such as U.S. interest rate policies, oil prices, and major global conflicts.”

A rise in gold prices often signals economic distress. If the U.S. economy weakens, stimulus measures such as quantitative easing (QE) could be implemented, resulting in a weaker dollar. This, in turn, boosts demand for gold. The Thai gold market is particularly sensitive to these global economic shifts, as fluctuations in the U.S. economy can influence domestic investment trends.

When asked whether high gold prices indicate long-term economic struggles, Mr. Jitti predicted short- to medium-term effects. Inflationary pressures and increased import costs could push investors toward gold. Additionally, uncertainties surrounding ongoing conflicts, such as the Israel-Hamas war, could further drive demand. If tensions escalate, gold prices may reach new highs, potentially surpassing $3,000 per ounce by the second quarter of the year.

For Thai investors considering gold, Mr. Jitti advised carefully monitoring economic indicators such as inflation, interest rates set by the U.S. Federal Reserve, and global geopolitical developments. In recent years, financial instability among major U.S. banks has significantly impacted gold prices, making it crucial for investors to stay informed.

The impact of external factors such as oil prices, natural disasters, and pandemics was also discussed. These elements can disrupt global economies, increasing demand for gold as a crisis hedge. Additionally, fluctuations in U.S. interest rates play a critical role—lower rates typically support gold prices, though the likelihood of rate cuts this year remains uncertain due to persistent inflation concerns.

When asked whether gold remains a safe investment over the next five years, Mr. Jitti expressed uncertainty about long-term trends but remained confident in its short-term potential. “For the next one to two years, gold remains a strong investment option,” he stated. “However, investors should diversify their portfolios to minimize risks.”

As Thailand continues to navigate global economic shifts, the gold market remains a crucial sector to watch. With ongoing geopolitical tensions and unpredictable policy changes from global economic leaders, Thai investors must stay vigilant to make informed decisions in the evolving financial landscape.