Bangkok: The President of the Gold Traders Association has observed extreme volatility in the global gold market, highlighting an unconventional trend where gold prices have declined despite intensifying military hostilities. Jitti Tangsithpakdi, President of the Gold Traders Association, addressed this instability following a precipitous drop in domestic gold prices totaling 3,550 baht on Tuesday, with erratic fluctuations continuing throughout the current session.
According to Thai News Agency, despite this, the association anticipates that global gold prices will maintain a solid support floor above the 4,100 US dollars per ounce level. A significant departure from traditional market behavior has been noted; typically, gold appreciates during times of war due to its status as a premier safe-haven asset. However, as the current conflict shows signs of becoming protracted and widespread, prices have unexpectedly declined-a phenomenon described as unprecedented in recent market history.
Another major factor contributing to the downturn is a substantial sell-off by SPDR Gold Shares (GLD), the world's largest physically-backed gold ETF. The fund has reportedly divested over 40 tonnes of its holdings, a stark contrast to its aggressive accumulation strategy throughout January and February. This rapid liquidation suggests the fund may be realizing losses on recent acquisitions to maintain liquidity.
Despite these immediate pressures, the association maintains its stance on gold as a premier safe-haven asset. While the market has experienced a sharp correction, it follows a period of sustained growth. From a long-term perspective, gold continues to be viewed as a reliable hedge against inflation, capable of preserving purchasing power.
Furthermore, Mr. Jitti emphasized that investors must remain vigilant regarding global developments, particularly the ongoing conflicts involving Iran, the United States, and Israel, as well as protracted trade wars. He advised utilizing "cold money"-capital not required for immediate expenses-for market entry, maintaining that a long-term investment strategy remains the most prudent approach.
Regarding the annual outlook, the Association President expressed skepticism that the valuation would reach the 100,000 baht mark within the current calendar year, though a rise toward the 90,000 baht level remains a distinct possibility. Meanwhile, the atmosphere at retail outlets remains remarkably active, with a surge of investors purchasing gold bullion to capitalize on the recent price correction.
"I believe that the recent significant decline in gold prices, even as global conflicts persist, will soon see greater clarity regarding its underlying causes. I anticipate that the projected support level of 4,100 US dollars per ounce should hold firm; however, I expect gold prices to remain volatile in the short term, and investors must continue to exercise extreme caution. Typically, during periods of war, rising inflation and surging oil prices drive gold prices higher in a synchronized trend. Yet, this time, despite the conflicts becoming protracted and expanding in scope, gold prices have unexpectedly declined-a market phenomenon that I have never witnessed before in my experience," said Jitti.