Gold prices could reach a new record high in the near future, supported by a weak US dollar as China has started buying gold to build up its reserves, says Bualuang Securities (BLS).
Spot gold held steady at around US$2,761.93 per ounce on Wednesday, as US gold futures added 0.1% to $2,769.80.
Last week, prices were trading near record-high levels, but they fell more than 1% on Tuesday as investors rushed to liquidate bullion to offset losses triggered by a sharp pullback in technology stocks, spurred by DeepSeek's low-cost, low-power artificial intelligence model.
The Federal Reserve trimmed US interest rates last month by 0.25%, signalling the start of a full-fledged rate-cutting cycle, noted BLS.
Moving forward, the anticipated economic landscape under the Donald Trump administration and inflation trends will be key factors shaping the Fed's interest rate decisions, noted the brokerage.
For 2025, the market expects one or two rate cuts, with the first likely occurring in June, said BLS.
Gold gained about 30% last year, trailing Bitcoin, which surged by 120%. Analysts maintain gold remains in a strong uptrend, having previously reached a record high of $2,789 per ounce.
According to BLS, gold shows bullish momentum this month, approaching key resistance levels.
The latest movement suggests an imminent breakout past minor resistance, nearing last year's peak, noted the brokerage.
Investors are advised to monitor bullion's price movements and await a breakout to new all-time highs. The expected resistance range is $2,800-$3,000 an ounce, supported by a weakening US dollar and increased gold purchases by the Chinese government for reserves, said BLS.
The Gold Traders Association adjusted domestic gold prices on Wednesday by 100 baht in early morning trade, pushing the price to 44,150 baht per baht-weight for gold bar and 44,650 baht for gold jewellery.
Pawan Nawawattanasub, chief executive of YLG Group, said gold demand during the Chinese New Year festival has been as vibrant as in previous years, as gold remains a popular gift in Asia.
However, during China's long Golden Week holiday, when the gold market is closed, demand from China temporarily vanishes, often leading to a potential buying opportunity, said Mrs Pawan.
If gold prices show only limited declines after Golden Week, there is a strong chance of a rebound, she said.
Historically, gold prices tend to rise within three days of the Chinese market reopening, with the potential to test resistance at $2,800-$2,850 an ounce, according to YLG.
An additional factor supporting gold prices after the Lunar New Year is the uncertainty surrounding Trump's policies, particularly the possibility he pressures the Fed to lower interest rates, said Mrs Pawan.
