Gold still a good bet: traders

Gold Trading Association presi¬dent Jitti Tangsithpakdi said it was a good opportunity for people to invest in gold, but recommended them to hold it as a longterm investment.

Jitti said the metal should be one of several diversified assets that investors put their money into.

However, he warned shortterm speculators that he could not recom¬mend whether it was suitable for them to speculate on gold.

"If you want to gamble on gold, I'm not sure it is a good time. You must closely monitor it [the price]. I can't predict the price in the short term. It could be very volatile," Jitti said.

Despite his warning to shortterm investors, he believed the gold price would rise after recent declines, though it might not reach $1,000 per ounce.

Global gold prices have fallen sig¬nificantly in line with oil prices over the past months. In addition, world¬wide supplies have not met demand.

"It is the right time for medium to longterm investors to start piling into gold," said Auriris president, Boonlert Siripatvanich.

Ausiris is a physical gold trader and one of just two online gold deal¬ers in the country.

"Further downside risk remains, but is limited. The next psychologi¬cal barrier is at $800 an ounce. In a worstcase scenario, gold may drop to the next support level at $785 per ounce if oil falls below $100 per bar¬rel, but I do believe that it will be quite difficult to arrive at that point," he said.

In market terms, the price this week should rebound as it has fallen continuously for five weeks due large¬ly to the appreciation of the US dol¬lar, Boonlert said.

He suggested investors use a half or onethird of their investment cap¬ital to buy physical gold at the cur¬rent level.

Between 10 per cent and 25 per cent of their investment portfolio should be allocated to gold as part of a diversified investment plan.

"I think the gold price in the short term could climb back to around Bt13,800 per 15.16 grams [baht weight]. We have many buy orders at my company, as investors think that the current price level is attractive," he said.

"The recent selloff in gold is mainly driven by a strong US dollar," Wallace Ng, chief trader for precious metals in Asia Pacific at Fortis Bank in Hong Kong, said yesterday.

"Technically, spot gold at $800 an ounce is a critical area and if the price breaks that, then we will see a further downward move," Ng said. "I think gold will rebound slightly before it goes down again, as the market has been very much oversold."

"Whilst gold has dropped rapidly in the last few days, we cannot help thinking that it should find some sup¬port from factors such as inflation, geopolitical tensions and falling fresh supplies," Darren Heathcote, head of trading at Investec Bank in Sydney, said in a report yesterday.

"Technical charts signal further losses in gold and silver, as both have broken through key support levels and look set to extend their declines in the weeks ahead," Robin Wilkin, head of currencies and commodities technical analysis at JPMorgan Chase in London, said in a report.

India, the world's biggest buyer of bullion, may increase imports for the first time in 11 months as the lower price may attract buyers.

Purchases may rise as jewellers rebuild inventories before the festi¬val season starts later this month, said Suresh Hundia, president of the Bombay Bullion Association. Imports more than halved in the 10 months ending July 31 from a year ago, as record prices cooled demand, he was quoted by Bloomberg as say¬ing.

"Demand has been so high in the last couple of days that banks and other gold importers have run out of supplies," Hundia said in Mumbai, where the grouping of 230 trading companies is based.

"If the price keeps falling, there is no reason why people won't contin¬ue to buy.''

A recovery in Indian demand may help stem a drop in gold prices, which led other precious metals including platinum and silver into a bear mar¬ket after falling 22 per cent from its March 17 peak of $1,032.70 an ounce.

Indian imports in the three months ended July likely fell by as much as 35 per cent from a year ago after a 50percent slump in the pre¬vious three months, said Ajay Mitra, managing director of the producerfunded World Gold Council.