Traders expect a gold price of US$1,300 an ounce in the first quarter amid concerns over slower US GDP growth and the dollar's unstable value.
Gold hovered at $1,289 as of press time on Friday.
The price of gold has continued to surge since early December, despite a series of rate hikes by the US Federal Reserve last year.
Fund flows have moved into safe-haven assets such as gold and SPDR funds, while Gold-D, a physical settlement gold futures contract based on gold bars with 99.99% purity on the Thailand Futures Exchange (TFEX), has logged active trading after launching for two months. Brokerage firms expect trading turnover to average 10,000 contracts daily this year.
Gold Traders Association president Jitti Tangsithpakdi said gold has traded in a range of $1,150-1,350 an ounce this year and the price is expected to continue rising if US GDP growth weakens and the dollar continues to depreciate.
Domestic bullion trade remains inactive because of Thailand's lukewarm economic growth and tepid private consumption due to ebbing commodity prices, Mr Jitti said.
Nuttapong Hirunyasiri, managing director of MTS Gold Futures, said capital has yet to move into the US money market despite the Fed's interest rate hikes. He said the US economy is likely to experience a slowdown on adverse effects from the Sino-US trade disputes and slower global economic growth.
Gold has surfaced as a safe-haven asset for investors amid growing uncertainties in the global economy, Mr Nuttapong said.
Gold investment in the SPDR fund's portfolio has continued increasing by about 10 tonnes a month, according to MTS Gold Futures.
Gold prices are expected to move in a range of $1,280-1,300 an ounce, he said, and short-term trading is currently advised for gold investment.
Globlex Securities anticipates gold reaching $1,300 an ounce soon, with key supports from dollar depreciation and geopolitical risks such as the US government shutdown, Brexit uncertainty and the US-China trade row.
For Thailand's gold futures market, Gold-D has trading turnover of 2,000-3,000 contracts a day and the trading outlook is robust, supported by investors seeking refuge in a safe-haven asset class, Mr Nuttapong said.
Gold-D is projected to have average trading turnover of 10,000 contracts a day this year, he said.
Mr Nuttapong said one of the success factors of Gold-D is the product's design based on gold bars with 99.99% purity, while the trading price has been fixed at 30 baht to the US dollar.
The belief is that Gold-D could attract more investment incentives from local and foreign investors in the future, he said.
TFEX gold futures have shown the most active trading volume in Asean and have become No.3 by trade volume in Asia, trailing gold futures on the Shanghai Futures Exchange and Japan's Tokyo Commodity Exchange.
