Bangkok: Gold, considered a risky asset, experienced a significant decline today with a drop of 1,300 baht in the first hour of trading. This decline followed the strengthening of the dollar and easing concerns over the trade war. The Thai baht also weakened sharply while the International Monetary Fund (IMF) lowered its forecast for Thailand's GDP growth to 1.8% for this year.
According to Thai News Agency, the Gold Traders Association reported that as of 10:10 a.m., the price of gold had changed 10 times, resulting in a total decrease of 1,300 baht per baht of gold. The selling price of gold bars was listed at 53,150 baht, and gold ornaments at 53,950 baht, based on a GOLD SPOT price of 3,349 dollars per baht and an exchange rate of 33.51 baht per US dollar. The first price announced at 9:07 a.m. showed a sharp fall of 850 baht compared to the last trading price yesterday. Yesterday, the price of Thai gold rose significantly by 1,600 baht, with gold bars reaching a record high of 54,800 baht before closing the market at 54,450 baht.
This morning, the gold spot price decreased sharply from yesterday's record high by over 100 dollars to 3,380 dollars. Gold futures on the Commodity Exchange (COMEX) for June delivery fell $5.9, or 0.17%, ending at $3,419.40 an ounce. The market faced pressure from a stronger dollar and comments by US Treasury Secretary Scott Bessant, who expressed confidence that the US-China trade conflict would soon ease, prompting investors to hold off on purchasing gold, which is typically seen as a safe asset.
US Treasury Secretary Scott Bessant, speaking at an investor conference hosted by JPMorgan in Washington, indicated that while negotiations with China might be prolonged, both nations were keen to resolve the situation. US President Donald Trump suggested that final tariffs on Chinese goods would not reach 145% but would not be zero either. He also stated that he would not remove Jerome Powell as Federal Reserve Chairman before his term ends in May 2026, though he continued to press for interest rate cuts to stimulate the economy, emphasizing the need for timely decisions.
These developments alleviated concerns regarding the Fed's independence and spurred an increase in Dow futures of over 500 points, driving up Thai and Asian stock markets. Meanwhile, the IMF revised its forecast for global economic growth to 2.8% and 3.0% for 2025 and 2026, respectively, down from a previous forecast of 3.3% for both years. The IMF expects the global economy to be impacted by US tariffs and has also lowered its GDP growth projections for the ASEAN-5 countries, including Thailand, which have been significantly affected by US retaliatory tariffs. Thailand's GDP is now expected to grow by only 1.8% this year, down from an earlier estimate of 2.9%, with next year's growth forecast at just 1.6%.
The dollar index rose 0.56% against a basket of six major currencies yesterday, reaching 98.918, exerting pressure on the gold market as a stronger dollar makes dollar-priced gold contracts less appealing to investors holding other currencies. The Thai baht opened this morning at 33.63 baht per dollar, significantly depreciating from the previous day's closing level of 33.23 baht per dollar. Mr. Poon Panichpiboon of Krungthai GLOBAL MARKETS, Krungthai Bank, explained that the baht has been weakening since last night, breaking through the resistance zone of 33.50 baht per dollar. This followed easing concerns over the US-China trade conflict after statements from US Treasury Secretary and President Trump, along with reduced fears of political interference in the Fed's operations.
In light of the high volatility in the financial market, particularly with upcoming uncertainties related to President Trump, it is advisable for market players to adopt diversified risk hedging strategies using tools such as options or local currencies, enhancing the efficiency of hedging against exchange rate risk.