Tipa Nawawattanasub, CEO of YLG Bullion & Futures Co, said last week that the gold price is undergoing a correction. Earlier declines in the precious metal's price came after the appreciation of the US dollar against the euro due to Standard & Poor's credit downgrade of Greece, which may need debt restructuring.

"The selling by funds has also driven gold prices down. This is particularly true for the 99-per-cent sale of the world's largest exchange-traded fund, SPDR Gold Trust, by Soros Fund Management in the first quarter of this year. This has had a psychological impact on the gold price, which may find it difficult to rise," Tipa said.

YLG expects the corrections during this period will be only short-term, as factors to support gold prices exist. These factors include inflation, the unrest in the Middle East, expected weakening of the US dollar in the long term and concerns over the US sovereign-debt level, which is approaching a legal ceiling. Currently, the legal ceiling is US$14.3 trillion (Bt429 trillion).

If this issue is not solved, the United States might be able to use more fiscal measures as economic stimulus. Only using measures is not sufficient to prop up the fragile US economy. But if the US adjusts its ceiling and utilises additional fiscal measures, that would likely heighten long-term risks to its economy. Even if it is the former choice or the latter, it remains difficult for investors to sell gold.

Investors should keep a close eye on the end of short-term corrections to accumulate gold again. Preliminarily, YLG estimates a turning point of the gold price at $1,460 an ounce and $1,440 an ounce or about Bt20,850 per baht weight and Bt20,550 per baht weight.

Tanarat Pasawongse, managing director of Hua Seng Heng Gold Futures Co, said gold price will tend to rise from now to the end of this year and could rise further next year due to the still weak US economy and Europe's sovereign-debt crisis.

In the past 10 years, the gold price has risen about 15 per cent a year. Last year, after the global recession, combined with more gold as international reserves and hedge funds' speculation, gold prices registered an irregular surge of 29 per cent.

The metal price reached a record $1,577.57 an ounce on May 2. After its new high, there was profit-taking especially from Soros Fund, driving its price down but not creating a bubble.

"After concerns in the Middle East, the US economy and Europe, combined with high seasons in the late third quarter and the fourth quarter, the company revised upward this year's target to $1,600 an ounce, from a previous estimate of $1,550 an ounce," Tanarat said.

The weakening of the baht has given quicket profit to gold investors. So far this year, local gold has yielded about 6 per cent, higher than the return on investment of global gold, and could provide higher returns for the whole year. In the past 10 years, the average annual return on gold was about 15 per cent, higher than the inflation rate.