BANGKOK, Thailand – Gold prices faced heavy selling on Monday, September 28, with spot gold falling almost 4% to a low of $4,110.55 per ounce, its lowest level in more than seven weeks.
The sell-off came as oil prices jumped around 3–4% during the session, with Brent crude briefly reaching about $108 a barrel before easing to close at $105.28. Renewed US-Iran tensions contributed to the rise in oil prices.
Higher oil prices revived concerns that inflation could remain elevated, potentially prompting the US Federal Reserve to maintain a restrictive monetary policy or raise interest rates again. At the same time, higher US Treasury yields and a stronger dollar added further pressure on gold.
Reuters reported spot gold at around $4,136.81 per ounce during trading, down about 3.5%, while US gold futures settled at $4,168.40, also down 3.5%.
Markets were pricing in about a 94% probability of another Fed rate increase in December, according to the report. Rising yields and a stronger dollar increase the opportunity cost of holding gold, which does not pay interest.
The latest move is notable because geopolitical tensions and inflation risks would normally support gold as a safe-haven asset. In this case, however, markets placed greater weight on the potential combination of higher oil prices, inflation, interest rates, Treasury yields and the stronger dollar.
Thai gold faces further pressure
Thai gold prices are also under pressure following the sharp decline in global prices.
On Monday, September 28, 96.5% gold bullion opened down 850 baht, with the buying price at 66,800 baht and selling price at 67,000 baht per baht-weight. Prices were reduced several times during the day as global gold weakened.
By the close, Thai gold bullion was selling at about 66,150 baht per baht-weight, down around 1,700–1,750 baht from the previous session. At the Thai market close, spot gold was around $4,156 per ounce. Global prices subsequently fell further overnight, reaching $4,110.55.
Based on the price difference, and assuming the baht remains broadly unchanged, Thai gold could face additional pressure of around 300–400 baht if spot gold stabilizes around $4,130–$4,140, putting the estimated selling price at around 65,750–65,850 baht per baht-weight.
If spot gold retests $4,110 and the baht does not weaken enough to cushion the decline, Thai gold bullion could come under pressure toward approximately 65,400–65,500 baht per baht-weight, around 600–750 baht below Monday’s closing level.
Three factors will be closely watched this week: whether global gold can hold above $4,100 an ounce, movements in the baht and changes in the US dollar and Treasury yields. Markets will also monitor US economic data, particularly employment and inflation figures, for clues about the Fed’s interest-rate path and the next direction for gold prices.
