Thailand gold price jumps as weak US labour data boosts demand
Thailand’s gold price closed 1,450 baht higher on July 3, with gold ornaments selling at 66,350 baht as weak US jobs data lifted bullion.
- Thailand's domestic gold price increased sharply, closing 1,450 baht higher than the previous day.
- The price surge was driven by weaker-than-expected US labor market data, with June's non-farm payrolls falling significantly short of forecasts.
- The disappointing jobs report led investors to lower their expectations for a US Federal Reserve interest rate increase.
- This resulted in a softer US dollar and lower Treasury yields, which decreased the opportunity cost of holding gold and boosted its demand.
Thailand’s domestic gold price ended sharply higher on Friday (July 3), closing 1,450 baht above the previous day’s level after 17 intraday adjustments, according to the Gold Traders Association.
The 17th and final announcement, issued at 5.22pm, put the gold bar buying price at 65,350 baht per baht weight and the selling price at 65,550 baht. Gold ornaments were bought at 64,035.84 baht and sold at 66,350 baht per baht weight.
At the market close, global spot gold stood at US$4,181.00 per ounce.
YLG’s evening gold analysis noted that gold prices rose by more than 1% towards US$4,200 per ounce after US non-farm payrolls came in below expectations. The US economy added 57,000 jobs in June, the lowest level in four months and below market forecasts of 110,000, while the unemployment rate stood at 4.2%.
The figures led investors to scale back expectations of a US Federal Reserve (Fed) interest-rate increase. The CME FedWatch Tool showed that the market-implied probability of a Fed rate rise at the September meeting had fallen to 54%, down from 66% before the data release.
A weaker labour market eased pressure on the Fed to maintain tight monetary policy. US Treasury yields and the dollar softened, lowering the opportunity cost of holding gold, which pays no interest, and helping support the rebound in bullion prices.
The World Gold Council also reported that central banks worldwide returned to net gold buying in May, adding a net 41 tonnes to reserves. The data pointed to continued demand for gold as a reserve asset, providing a fundamental factor supporting the longer-term outlook for prices.
