Feeding frenzy for Fed interest rate meeting

With spot gold closing at an all-time high of US$3,004.86 per ounce on Friday, March 18-19 could be a turning point for both the stock market and precious metal prices, as US Federal Open Market Committee (FOMC) officials meet again.

However, after the increase, profit-taking led to a small dip in gold prices, falling 0.1% to $2,986.26 an ounce at 2. 01pm Eastern Time (1. 01am Bangkok time) the same day.

Investors are seeking safe assets due to the risk of a trade war and tariffs from US President Donald Trump.

Strong demand from central banks is also supporting gold, with big buyers such as China boosting their gold reserves for a fourth straight month in February.

Domestic Gold Market

The morning of March 17, 2025, Thailand’s gold prices opened up 100 baht before a second adjustment at 10 am, dropping 50 baht. Gold prices, however, still stayed at a record high at 47,650 baht per one-baht weight (15.1 grams), unchanged from Friday’s closing level, after being adjusted​ down​ by 150 baht with a one-time​ adjustment​ on Saturday.

The Gold Traders Association reported on its website that, from the 10.25am update, gold bars were being purchased at 47,450 baht per one-baht weight and sold at 47,550 baht, and gold ornaments were bought at 46,601.84 baht per baht-weight and sold at 48,350 baht.

Analysis and Predictions

gold prices hit record-high levels last week before pulling back slightly, said gold trader Hua Seng Heng. We are, of course, very concerned with the growing global trade war, with trumpets threatening 200% tariff imports of alcohol and wine from the EU.

Concerns about a potential economic slowdown have also weighed on investors given US inflation figures for February — the Consumer Price Index (CPI) and Producer Price Index (PPI) — were weaker than expected. This has sparked speculation that the Fed could cut rates further. The SPDR Gold Trust, the largest gold-backed exchange-traded fund globally, added 12.07 tonnes of gold last week.

This week, investors need to keep an eye on the Fed meeting, where the market expects the FOMC to leave interest rates unchanged, but also source the statement from the Fed chairman, possibly Hua Seng Heng said.

Technical Analysis

After gold prices tested the psychological resistance level of $3,000, there was slight selling pressure, analysts said. But buying pressure was anticipated to come back yesterday. The temporary drop in the price of gold recently can be attributed to short-term profit taking, perceived as a step for further upward adjustments. Support for gold prices is seen at $2,970 per ounce, while resistance is at $2,955 per ounce.

Gold bars are now priced at an all-time high of 47,650 baht domestically, according to Hua Seng Heng analysts, falling an increase of 11.3% year-to-date.

“The price for gold bars will go down a little before hitting another rise,” the spokesperson added. We are advising to ‘Let profits run,’” the analysts said.

Broader Economic Impact

Gold prices hit a record high last week on softer-than-expected inflation and ease on the trade war front, Pi Securities analysts said. But gold demand is still expected to wind down in the near term, especially as US economic data this week comes in. Key data to watch includes US retail sales, due tonight with the Bloomberg Consensus expecting a 0.6% mom rise.

A major event will come Thursday at 1am, when the FOMC announces its decision.

Data from the CME FedWatch tool shows that interest rates have a 98% chance of remaining the same. But the market is focused closely on the Fed chairman’s speech and hints for any potential rate cuts ahead. The Fed explicitly hints at possible easing, and it lifts global stock markets, gold and currencies. However, a more hawkish stance could weigh on risk assets.

Market Updates

The baht also continues strengthen on the back of a weaker US dollar. The baht opened at 33.67 to the US dollar yesterday after closing at 34.64 the previous day. Analysts at Krung Thai Bank sees the baht moving in a range of 33.35-34.10 per US dollar this week domestically depending the Fed’s decision overnight and next US economic indicators.

At the same time, the Thai stock market was still volatile yesterday. As of 11.25 am, the SET Index was at 1,169.22 points, decreased by 5.24 points (-0.46%), with a total trading value of 15.1 billion baht.