Bangkok: Gold prices surged while the Thai baht strengthened significantly following the United States' decision to increase its bond repurchase program. The price of gold ornaments reached a notable 70,000 baht, influenced by a sharp rise in global market prices. Concurrently, the Thai baht appreciated to below 33 baht against the US dollar after the US Treasury Department announced a more than twofold increase in its bond repurchase program, raising it from $2 billion to at least $4 billion.
According to Thai News Agency, the Gold Traders Association reported a significant surge in the opening price of gold, rising by 1,550 baht per baht. This increase pushed the selling price of gold ornaments to exceed 70,000 baht per baht. The first announcement of the gold price at 9:03 AM indicated the following prices: Gold bars were being bought at 69,650 baht per baht and sold at 69,850 baht per baht, while gold ornaments were bought at 68,250 baht per baht and sold at 70,650 baht per baht.
Hua Seng Heng Gold Futures Co., Ltd. analyzed that the recent movements in gold prices are attributed to a decline in the US dollar index (DXY), which fell to 98.76 from a previous 99.66. Additionally, the yields on 10-year and 30-year US Treasury bonds dropped below 4.70% and 5.20%, respectively, following the Treasury's announcement of an enhanced debt buyback program. The increase in the buyback program is set to take effect from September 9th until November 4th, leading to a rapid decline in US bond yields and reducing the opportunity cost pressure on gold holdings.
In contrast, oil prices, including Brent and WTI, remain under the threat of further increases. Iran's potential military actions against US targets in Europe, should President Trump initiate a new conflict, could drive inflation and potentially trigger future interest rate hikes by the Federal Reserve, posing a challenge for gold.
Yesterday, the closing price of COMEX gold futures for December delivery saw a substantial rise by $124.70, closing at $4,545.30 per ounce.
Kasikorn Research Center highlighted the Thai baht's strengthening, which broke through the 33.00 mark to reach approximately 32.85-32.87 baht per dollar this morning, compared to the previous day's closing level of 33.06 baht per dollar. The baht's appreciation aligns with trends seen in other Asian currencies and the global increase in gold prices.
The US dollar experienced ongoing selling pressure as US bond yields continued to decline following the US Treasury Department's announcement regarding the increased repurchase of long-term government bonds.
For today's trading, the estimated range is between 32.75-32.95 baht per dollar. Key factors to monitor include foreign investor fund flows, developments in the Middle East, and US economic data such as weekly jobless claims and the August business outlook survey from the Philadelphia Fed.