Ms Tipa said that if $4,000 is breached, gold will likely find its ultimate bottom at $3,600. Based on an exchange rate of 32.5 baht to the dollar, domestic gold bars would be quoted at 55,000 baht per baht weight, she added.
A growing narrative hinting at a faster-than-expected US interest rate hike could push gold prices down to US$3,600 an ounce or as low as 55,000 baht per baht weight for domestic gold bars in the near term amid persistent concerns over elevated inflation, says YLG Bullion and Futures.YLG chief executive Tipa Nawawattanasub said the key near-term pressure for gold is US monetary policy, as markets are wrestling with the possibility of "higher-for-longer" Federal Reserve (Fed) rates and an earlier-than-expected tightening cycle.
"While the June meeting and recent polls suggest the Fed will hold rates steady, there are growing narrative hints of a faster-than-expected tightening cycle," said Ms Tipa.
If the Fed hikes in October, driven by sticky inflation from energy shocks and prolonged conflicts, that would be a major headwind for gold, pushing real yields, currently sitting around 2%, and the dollar higher.
YLG sees immediate psychological support for gold at $4,000 for the time being, or 61,000 baht per baht weight for domestic gold bars.
