People flock to sell gold amid massive price rise

AFTER gold price soared to an all-time high there was a big rush to sell the precious metal in Yaowaraj area of Chinatown with people eager to lock in their profit amid a steep climb of 1,300 baht a baht weight this week, INN News, and CNBC reported today (July 25, 2020).

People steadily streamed in and lined up at various gold shops in the area to sell their gold spurred on by a rise of another 50 baht this morning.

The Gold Traders Association announced at 9.28 a.m. that today’s selling price of one baht weight gold bars is 28,400.00 baht and buying price 28,300.00 baht.

The selling price of an equal weight of gold ornaments is 28,900.00 baht with tax base being 27,788.28 baht.

Mr Yuthichai Khobthong, a salesman at Chin Hua Heng gold shop said even though the price has risen to a giddy height the the crowd selling gold is not as thick as when Covid-19 first broke out.

At that time people had panicked and sold because they did not think the price could go any higher while needing to hold cash in hand to cope with the outbreak of the disease.

However he added that his shop is fully prepared to buy all the gold people are bringing in to sell.

Meanwhile reported that history was made on Friday when gold pricing closed near the highest daily level since August 22, 2011. In fact, as of 5:50 p.m. EDT gold futures basis the most active August contract was settling at approximately $1900.30. On a weekly chart gold closed at a new record price for the highest weekly close.

Considering that this massive rally began in the middle of March in response to an epidemic becoming a global pandemic with gold trading at approximately $1450 per ounce. In this short time span of four months traders have witnessed gold prices rise dramatically from the mid-March lows to close today within pennies of $1900.

Meanwhile CNBC reported that gold prices rose to an all-time high on Friday because investors sought safety in the precious metal amid rising US-China tensions and lingering fears over the coronavirus pandemic.

The metal’s August futures contract rose 0.4% to settle at $1,897.50 per ounce, according to data from the CME Group. This also marked gold’s sixth straight day of gains. Gold also notched a seven-week winning streak.

Tensions between China and the US rose this week. Overnight, China ordered the US to close its Chengdu-based consulate. Earlier this week, the US had a Houston-based Chinese consulate closed.

“US-China tensions continue to escalate, which prompted a risk-off move in markets on Thursday and Friday,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. He pointed out gold is also one of the best-performing assets this year, rising more than 24%. He also said political uncertainty is likely to persist throughout the year, which he forecast could lift gold to $2,000 per ounce.

Haefele also pointed out the move higher in gold comes as the US dollar has fallen sharply recently. The dollar index — which measures the greenback’s performance against six other currencies — is down more than 1% this week and has fallen for five straight weeks.

“While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar,” he said.

Gold’s gains also come as the coronavirus pandemic continues to ravage the global economy. Data compiled by Johns Hopkins University showed more than 15 million coronavirus cases have been confirmed globally.

In the US alone, over 4 million infections have been reported along with at least 144,552 deaths. Several states and countries have had to postpone or roll back reopening plans as cases keep rising.


Top: People selling gold at a Yaowaraj gold shop while below some some gold chains for sale. Photos: INN News

TNR staff
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