Thai gold tumbles 3,400 baht as global sell-off sends spot price to six-week low

Thailand’s gold market came under heavy pressure on Thursday (March 19), with the Gold Traders Association revising prices 53 times during the day before bullion closed sharply lower, reflecting a steep global sell-off in the precious metal.

By the close, local gold prices had dropped by 3,400 baht from the previous day. Gold bullion was quoted at 72,900 baht per baht-weight for buying and 73,100 baht for selling, while gold ornaments were quoted at 71,449.08 baht for buying and 73,900 baht for selling. Spot gold was last reported at US$4,707 an ounce.

Global gold slump drags Thai market lower

The drop in Thai gold prices followed a broad decline in the global market. Reuters reported that spot gold fell 2.2% to US$4,710.88 an ounce by 0920 GMT on Thursday, its lowest level since February 6, while US gold futures for April delivery dropped 3.6% to US$4,721.40.

The fall marked a second straight day of heavy losses, with bullion retreating after slipping below the key US$5,000 level. The pull-back came after gold had previously surged to record highs, prompting investors to lock in profits and cut exposure.

Stronger dollar and higher yields hit bullion

The main pressure came from a stronger US dollar and rising yields on benchmark 10-year US Treasury bonds, which made gold more expensive for holders of other currencies and reduced the appeal of the non-yielding asset.

The market was also rattled by a more hawkish tone from Federal Reserve Chair Jerome Powell after the latest Federal Open Market Committee meeting. Central banks in the United States, Canada and Japan also struck a cautious tone on Wednesday, amid concerns that rising energy prices could trigger another wave of inflation.

While gold is traditionally viewed as a hedge against inflation and uncertainty, higher interest rates tend to weigh on demand by increasing the opportunity cost of holding bullion and making yield-bearing assets more attractive.

Oil shock adds to inflation fears

Another major factor was the jump in oil prices, which climbed above US$115 a barrel after Iran attacked energy facilities across the Middle East following Israel’s strike on Iran’s South Pars gas field, in a major escalation of the war.

Higher oil prices could feed into inflation if businesses pass on rising costs, reinforcing expectations that the Fed may keep interest rates higher for longer. That in turn added further pressure on gold, despite the metal’s usual safe-haven appeal during geopolitical crises.

Baht swings amplified local volatility

In Thailand, volatility in the baht added to the speed and severity of the local price decline. With world gold prices falling sharply and the exchange rate fluctuating throughout the session, domestic gold prices adjusted more rapidly than usual.

The result was one of the most volatile trading days in recent weeks, with repeated price revisions keeping investors and retail buyers on edge.

Market outlook remains divided

Despite the sharp correction, some analysts still see geopolitical tension as a longer-term support factor for gold. In the near term, however, the market is likely to remain sensitive to US economic data, central bank signals, oil prices and developments in the Middle East.

Other precious metals also fell on Thursday, with spot silver down 4.8% to US$71.74 an ounce, platinum down 3.6% to US$1,949.45, and palladium down 1.7% to US$1,451.