Bangkok: The Thai baht opened at 30.98 baht per dollar this morning, bolstered by a continued rise in gold prices amidst growing concerns over US trade policy.
According to Thai News Agency, global financial markets are at a critical juncture, with the US economy showing signs of a potential slowdown. In Thailand, all eyes are on the upcoming Monetary Policy Committee meeting, which is anticipated to maintain interest rates. Experts are advising investors to adopt a "barbell" portfolio strategy, emphasizing strong technology stocks coupled with gold to manage market volatility.
Mr. Poon Panichpibul, a strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, highlighted that the baht's strengthening is influenced by rising gold prices and ongoing geopolitical tensions between the US and Iran. The baht is expected to trade within a range of 30.85-31.05 baht per dollar over the next 24 hours. The uncertainty in US trade policy is also exerting downward pressure on the dollar, though the full impact may take up to 150 days to materialize as US authorities assess additional tariff measures.
Despite the baht's recent appreciation, there is a consensus that it might be overvalued if it strengthens further to the 30.50-30.75 baht per dollar range. The fair value is estimated to be around 33-34 baht per dollar, suggesting current levels present an opportunity to gradually buy US dollars and other foreign currencies.
SCB Financial Markets projects the baht to trade between 30.90-31.20 baht per dollar today, supported by Thailand's robust export growth in January and a temporary stabilization of the US dollar index. The Gold Traders Association reported a third gold price adjustment at 10:30 AM, with gold bars priced at 76,150 baht and gold ornaments at 76,950 baht per baht, marking a 650 baht increase from the previous day.
Hua Seng Heng Gold Futures Co., Ltd. attributes the rise in global gold prices to concerns over a new trade war following tariff changes by President Trump. Goldman Sachs notes that Trump has several legal options for imposing tariffs, which could sustain market uncertainty. Meanwhile, the SPDR gold fund increased its holdings by 7.72 tons, now totaling 1,086.47 tons.
COMEX April gold futures recently rose by $144.70, closing at $5,225.60 per ounce, as investors seek safe-haven assets amid tariff-related uncertainties. Krungthai's Chief Investment Office (CIO) suggests that the US Supreme Court ruling against Trump's IEEPA tariffs introduces short-term policy uncertainty, potentially affecting global investor confidence and contributing to financial market volatility.
In Thailand, the Monetary Policy Committee is expected to maintain interest rates at 1.25%, with the meeting's outcome influencing the financial markets' short-term outlook. Krungthai CIO recommends a 'Barbell Strategy' for navigating these uncertainties, advocating investment in strong technology stocks and gold, alongside exploring high-growth markets like India and Vietnam to enhance portfolio resilience.