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Published on January 23, 2008

President and CEO Boonlert Siripatvanich said investors must take account of all factors that could influence the price

of gold and not look for short-term gains. Boonlert, with 15 years' experience in the gold business, highlighted the consistent rise in its value over the past seven years.

However, spot gold prices yesterday briefly dipped below the 1980 high of US$850 a troy ounce it smashed just weeks earlier. Gold has not been spared from the carnage hitting global equity markets, because investors exit their long positions to meet margin calls.

Gold has dropped nearly 7 per cent since hitting an all-time high of $914.40 (Bt30,300) per ounce on January 14. Hong Kong gold prices closed sharply lower yesterday at $850.25/$851, down from Monday's close of $879.50/$880.

"Since 2000, the value of gold has risen each year an average of 10-15 per cent, based on an average of international market prices," Boonlert said. "Last year, we witnessed a 35-per-cent rise, and this month we've seen gold reach an all-time high of $914 an ounce. This has given gold investors an attractive return compared with the stock market - which has shown considerable volatility - and the modest 3-5 per cent returns offered by government bonds."

Last week, Gold Traders' Association president Jitti Tangsithpakdi expressed concern that high global gold prices could affect the business of traders and goldsmiths in Thailand.

High gold prices have pushed investors to rush to sell gold for profit, while there are fewer buyers at the moment, Jitti said.

Boonlert is predicting a consistent demand for gold as investors seek refuge from the effects of global economic contraction, fuelled by the US sub-prime lending crisis and a general slowdown in world economic growth.

"We're expecting demand to remain as we approach Chinese New Year," he said. "The continuing political uncertainties in Thailand remain a leading factor when investors consider gold in preference to stocks, currencies and other commodities."

The value of gold will not decline in absolute terms, he said. Gold has a long history of waxing and waning in allure.

The advice from Ausiris is to accumulate gold slowly and steadily, rather than make a one-time bulk purchase.

The Nation