On February 2, gold prices in Thailand experienced a sharp decline of THB 3,250 from the previous day’s closing. According to the Gold Traders Association, the domestic gold bar buying price stood at THB 70,750, the selling price was at THB 70,950, while the ornamental gold buying price was THB 69,341.84, with the selling price at THB 71,750.
Globally, gold spot prices tumbled to $4,763 per ounce, driven by heavy profit-taking and widespread position reductions following recent gains. The rapid correction reflects a shift in investor sentiment toward cash, particularly in light of ongoing uncertainty over the Federal Reserve’s interest rate direction.
This sentiment change follows reports that Kevin Warsh, who has previously opposed continued Quantitative Easing (QE), is poised to be the next Fed Chair.
Takit Chardcherdsak, CFTe, CISA, Assistant Director of Research at Krungsri Securities (KSS), observed that the simultaneous fall in gold and equities across Asian and Thai markets is linked to a broad retreat from both safe-haven and risk assets, prompting investors to hold cash while awaiting clearer policy signals—especially from the Federal Reserve.
Other analysts echoed the view that uncertainty over the U.S. monetary policy, especially concerns that rate cuts may be delayed, is strengthening the US dollar and reducing gold’s appeal as a short-term hedge. Additional selling pressure has come from de-risking strategies and unwinding of leveraged positions, accelerating the gold price decline.
Asian stock markets have also exhibited a “risk-off” atmosphere, with widespread selling across many sectors—a mix of profit-taking and risk management as investors move to shore up liquidity.
According to Therdsak Thaveeteeratham, Deputy Managing Director, Research Division at Asia Plus Securities, Kevin Warsh’s appointment as Fed Chair suggests a possible shift away from monetary easing, contributing to a stronger dollar and higher U.S. bond yields. These developments have raised the cost of holding gold and slowed new purchases.
Technically, gold prices have broken through key 10- and 20-day moving averages, triggering further sales for risk reduction. Volatility is expected to rise further, a trend underlined by an unusually low Put/Call Ratio and increased margin requirements for gold futures at the CME (from 6% to 8%). These factors may force additional gold sales as investors adjust their positions.
Asia Plus cautions that after peaking sharply in early 2011, gold prices experienced a prolonged correction, signaling parallels for the current environment. The firm recommends increasing cash holdings to 20–30% and reducing exposure to gold and U.S.-linked assets, while favoring select foreign equities such as BABA80 and ONON03, as well as Thai stocks including COM7, ICHI, TRUE, PTTEP, and SIRI.
Meanwhile, the Thailand Futures Exchange (TFEX) has responded to global gold and silver volatility by announcing that, should prices move beyond +/-20% daily limits, trading bands can be temporarily expanded to +/-30%, and up to +/-100% if necessary. This measure follows a 20% drop in Silver Online Future prices on February 2, which triggered a widening of the daily price limit to 30%. The limit will return to normal after the daily settlement price is set before the night session.
TFEX advises investors to remain cautious and stay abreast of developments as the market continues to experience elevated volatility.
