Bangkok: Gold prices and the Thai stock index experienced a downturn, while the baht weakened, following the Federal Reserve’s decision to cut interest rates by 0.25%. The Thai stock market also faced selling pressure, particularly on DELTA shares.
According to Thai News Agency, the morning session of the Thai stock market closed at 1,308.07 points, reaching a high of 1,317.42 points. By 1:08 PM, the SET Index had dropped to 1,309.77, down by 5.87 points or 0.45%. The index saw a low of 1,302.30 points with a trading value of 22.132 billion baht.
Mr. Wichit Arayapisit, an investment strategist at Liberator Securities, shared insights on Channel 9 MCOT’s “Investment Minute” program, noting that the US Federal Reserve voted 10 to 2 in favor of reducing interest rates to a range of 3.75-4%. The Fed also announced the cessation of its “Quantitative Tightening” policy, aligning with market expectations. However, Fed Chairman Jerome Powell’s tentative stance on further interest rate cuts in December contrasted with market anticipations, leading to a rise in US government bond yields and a stronger dollar index, adversely affecting the Thai stock market. Despite this, domestic economic stimulus measures and potential talks between US President Donald Trump and Chinese leader Xi Jinping offer some optimism, suggesting a support level at 1,300 points.
The Gold Traders Association reported an immediate reduction in gold prices by 1,000 baht upon market opening. Initial prices for gold bars were set at 60,450 baht for buying and 60,550 baht for selling, while gold ornaments were bought at 59,245.28 baht and sold at 61,350 baht. The global gold price (Gold Spot) stood at 61,350 US dollars per ounce.
By 1:12 PM, prices had adjusted 23 times, with a cumulative drop of 700 baht. Gold bars were being bought at 60,750 baht and sold at 60,850 baht, while gold ornaments were bought at 59,533.32 baht and sold at 61,650 baht. The Gold Spot price was 3,957 US dollars per ounce.
Hua Seng Heng’s analysis noted that the Fed’s decision to cut rates by 0.25% saw differing opinions among committee members. Fed Chairman Powell’s comments on the uncertainty of a December rate cut reflected a slowdown in rate adjustments, exerting temporary pressure on gold prices.
The baht opened at 32.40 per dollar, weakening from the previous day’s 32.27. Mr. Poon Panichpibul, a strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, noted the baht’s gradual depreciation despite the Fed’s rate cuts and end of QT policy. The Fed’s non-unanimous rate cut decision and the uncertainty surrounding future cuts contributed to this trend. The baht’s value is expected to remain constrained as markets await outcomes from other major central banks like the BOJ and ECB, as well as economic reports and political developments in the US. The baht’s trading range is anticipated to be between 32.25 and 32.55 per dollar.