PATTAYA, Thailand – Gold prices have come under heavy selling pressure, marking one of the steepest corrections seen in decades and prompting debate over whether the move represents a temporary pause or the start of a deeper trend reversal.
Ms. Areerat Murachai, Chief Analyst at GCAP Co., Ltd. (GCAP GOLD), said the sharp decline followed an extended period of aggressive gains earlier this year, leaving the market vulnerable to a technical reset. The sell-off intensified after markets reacted to news surrounding the nomination of Kevin Warsh as the next U.S. Federal Reserve chair, a development that strengthened the U.S. dollar and pressured gold prices.
Warsh is widely viewed as a hawkish policymaker with a strong anti-inflation stance, limited support for quantitative easing, and a preference for reducing the Fed’s balance sheet. These expectations shifted investor focus toward the dollar and real bond yields, both of which weigh directly on gold.
Additional pressure came after CME Group announced higher margin requirements for precious metals trading, triggering forced selling among leveraged investors who had accumulated positions during January’s rally. Technical indicators also played a role, with gold previously trading in extreme overbought territory, pushing momentum-driven investors to lock in profits.
Despite the sharp pullback, GCAP GOLD notes that external risks remain firmly on the radar. Escalating tensions in the Middle East, particularly between Iran and the United States, could quickly revive demand for gold as a safe-haven asset should the situation deteriorate unexpectedly.
Markets are also closely watching the upcoming U.S. nonfarm payrolls report. A stronger-than-expected reading could further support the dollar and extend gold’s weakness, while signs of cooling in the U.S. labor market may provide room for a technical rebound.
GCAP GOLD maintains that the medium-term uptrend remains intact as long as prices hold above the key support zone near USD 4,200 per ounce. Short-term price action has begun forming higher highs and higher lows, suggesting the current move may still be a technical correction rather than a full trend reversal.
The firm recommends a cautious accumulation strategy, focusing on base-building near key support levels at USD 4,880 per ounce (around 73,200 baht for Thai gold) and USD 4,600 per ounce (approximately 69,100 baht). If prices can hold above these levels, gold may stage a short-term rebound toward resistance at USD 5,200 to USD 5,400 per ounce, equivalent to roughly 77,500–79,300 baht for Thai gold prices.
