Thai gold prices tumble as strong US jobs data hits markets

Thai gold prices opened sharply lower on Saturday, with domestic rates falling by 1,450 baht after global bullion prices dropped nearly 3% on stronger-than-expected US employment data.

The Gold Traders Association announced the first price adjustment of the day at 9.03am on June 6, reflecting a steep fall from the previous day’s volatile trading. On Friday, the domestic gold market changed 15 times before closing 150 baht lower.

After the latest adjustment, domestic prices for 96.5% gold were listed as follows:

Gold bars

• Buying price: 67,300 baht per baht-weight
• Selling price: 67,500 baht per baht-weight

Gold ornaments

• Buying price: 65,961.16 baht per baht-weight
• Selling price: 68,300 baht per baht-weight

The sharp domestic fall followed a heavy sell-off in global gold markets on Friday, as investors reacted to a stronger US nonfarm payrolls report. The data reinforced expectations that the US Federal Reserve may keep interest rates high for longer to contain inflationary pressure.

Spot gold fell 2.96% to US$4,341.52 per ounce at 1.44pm in New York, or 5.44pm GMT, after earlier touching its lowest level since March 24. Over the week, global gold prices were down about 4.3%.

US gold futures for August delivery closed 3.1% lower at US$4,365.30.

The US Labour Department, through the Bureau of Labour Statistics, reported that nonfarm payrolls rose by 172,000 jobs in May. April’s figure was revised up to 179,000 jobs, while a Reuters poll had expected only 85,000 jobs, compared with the original April figure of 115,000.

Bart Melek, global head of commodity strategy at TD Securities, said the employment figures were considerably stronger than expected. He noted that with the Iran conflict, high energy prices and inflationary pressure still in play, the Fed was unlikely to be in a position to cut interest rates, raising the opportunity cost of holding non-yielding gold.

US Treasury yields also rose after the jobs report, adding further pressure on gold prices. Higher bond yields typically make gold less attractive because bullion does not generate interest income.

Market expectations also shifted after the data. According to CME Group’s FedWatch tool, investors were pricing in about a 72% chance that the Fed would raise interest rates in December, compared with around 50% before the jobs data was released.

Gold has remained under pressure despite its traditional role as an inflation hedge. The latest market moves came as Brent crude prices headed for a weekly gain, while gold had fallen by more than 17% since the US-Iran war began in late February, as higher energy prices added to inflation concerns and expectations of higher interest rates.

Demand in India was weak during the week, while gold premiums in China also began to narrow.

Other precious metals also declined sharply:

• Spot silver fell 6.8% to US$68.86 per ounce
• Platinum dropped 5.9% to US$1,788.49
• Palladium fell 5.9% to US$1,242.50

All three metals were also heading for weekly losses, underlining the wider pressure across precious metals markets.

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