Gold's Downtrend Continues with Three Mounting Pressures; Analysts Recommend Accumulating Below 69,800 Baht

Langhong Commodities views the current pullback as a long-term accumulation opportunity if Thai gold prices weaken below 69,800 baht, while cautioning investors to exercise disciplined buying strategies. The global gold market has been trapped in a sideways downtrend for roughly three months. Spot gold closed Friday, May 22, at 4,509 US dollars, but continues to trade directionless, contrary to gold's typical behavior during geopolitical crises. Domestic gold remains attractive for accumulation if it breaks below 70,000 baht.

Pattarin Vachirakoporn, Chief Operating Officer of Langhong Commodities, revealed that gold is currently under pressure from multiple negative factors preventing any sustained upside. The three main headwinds are: shifting US Federal Reserve interest rate expectations, historic government bond selloffs, and the unresolved Iran-US tensions.

1. US Monetary Policy Markets are discussing the possibility of another Federal Reserve rate hike in late 2024, rather than the cuts previously anticipated. Current market pricing assigns approximately 42 percent probability to a rate hike, down from the previous week but still substantial enough to damage gold's sentiment. New Fed Chair Kevin Warsh maintains a cautious stance, though President Donald Trump has signaled allowing Warsh policy independence.

2. Historic Bond Selloff Global financial markets just recorded severe government bond selling from both Turkey and Europe, pushing bond yields sharply higher and creating enormous pressure on gold prices. While viewed as temporary capital reallocation, the negative impact is undeniable.

3. Iran-US Tensions Flare Again US-Iran negotiations have escalated tensions after Trump canceled all engagements to reassert control, dissatisfied with Iran's rejection of uranium-related proposals. Ongoing concerns about the Strait of Hormuz remaining closed to shipping, amid China and Russia's lack of concrete assistance, underscore a global energy and economic crisis.

Weekly Outlook Pattarin views short-term technicals as decidedly bearish, with prices trading below moving averages across all timeframes. Monday, May 25, is a US holiday, suggesting a quiet market with prices likely ranging between 4,450-4,600 dollars.

Pattarin considers this gold correction a golden opportunity for long-term investors, recommending accumulation when Thai gold bar prices drop below 69,800 baht. Given the sideways downtrend momentum, she suggests adjusting purchase intervals to every 1,000 baht (from the previous 500 baht) to manage risk.

For Short-Term Investors: · Key Support: 4,503-4,440 and 4,400-4,375 dollars (Thai gold 69,000-68,500 baht) · Key Resistance: 4,570-4,590 and 4,630-4,650 dollars If gold holds above 4,500 dollars and doesn't break the 4,480-dollar support, a rebound to the resistance zone for profit-taking remains possible.

Factors to Monitor Despite near-term consolidation, gold's long-term outlook remains supported by continued central bank purchases globally, indicating gold's future potential. "Patience" and "discipline in timing" are the essential keys. Next week's economic calendar requires attention to China's GDP figures.