Bangkok: Gold and stocks experienced a significant decline in Thailand as the baht weakened due to the ongoing war situation. The price of gold dropped by more than 2,000 baht per baht of gold, while the stock market fell sharply by over 30 points.
According to Thai News Agency, the Gold Traders Association reported a decrease in gold prices this morning, with gold bars selling for 68,300 baht per baht weight and gold ornaments for 69,100 baht per baht weight. This marked a decline of 2,150 baht per baht weight from the previous day. The spot gold price hit a low of US$4,355 per ounce, coinciding with the Thai baht weakening to less than 33 baht per US dollar.
Hua Seng Heng Gold Futures Co., Ltd. indicated that global gold prices are undergoing a downward correction. They recommend a gradual accumulation strategy, suggesting buying when prices test support at $4,300 and selling at resistance levels of $4,450 and $4,500 per ounce. The weakening Thai baht has influenced domestic gold prices, with a gradual selling strategy recommended at resistance levels of 69,700 and 70,200 baht, and buying at a support level of 67,500 baht.
The decline in global gold prices is attributed to the ongoing war and the stability of the US dollar index at 99.54 units. The 10-year US Treasury yield rose to 4.38% from 4.27%. Brent crude oil prices increased by 10% between March 16-20, leading the CME FedWatch market to forecast a 6.2% probability of a 0.25% interest rate hike at the next meeting.
Saudi officials reported that some Asian oil buyers are purchasing oil at $125 per barrel, with expectations of prices reaching $150 per barrel in early April. If the war continues until the end of April, prices could rise to $165-180 per barrel. The SPDR gold trust sold 14.57 tons last week, bringing its net total to 1,056.99 tons.
In the Thai stock market, the index fell by more than 30 points this morning, dropping to as low as 1,402 points. This was influenced by escalating tensions in the Middle East, particularly the potential closure of the Strait of Hormuz and threats to energy infrastructure, causing oil prices to rise and affecting global investment sentiment.
The Thai baht weakened to a new nine-month low of 33.03 baht per dollar, compared to last week's closing level of 32.78 baht per dollar. Kasikorn Research Center noted that the baht's continued weakening aligns with selling pressure on currencies and risky assets in Asia, alongside the drop in global gold prices below $4,400 per ounce.
The US dollar strengthened as a safe-haven currency amid concerns over the Middle East situation, which could escalate and increase risks. The dollar was also supported by changing market expectations regarding U.S. interest rates, with markets now believing that further rate cuts by the Fed are unlikely for the rest of the year.
Today's trading range is estimated to be 32.90-33.10 baht per US dollar. Key factors to watch include developments in the Middle East, global oil and gold price trends, and foreign fund flows.