Gold's downward price trend is over

Fed cuts, geopolitics support outlook

PUBLISHED : 12 May 2026 at 06:39

NEWSPAPER SECTION: Business

WRITER: Nareerat Wiriyapong

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Bullion has finished its downward trend, supporting the price to reach US$5,500 per ounce or 90,000 baht per baht weight for local gold bars by the end of the year, says Kritcharat Hirunyasiri, chairman of MTS Gold, one of Thailand's top three gold traders.

Despite the lingering conflicts in the Middle East over the past few weeks, gold has stayed firmly above $4,500 an ounce and significantly higher than this year's low of $4,100, he said.

"The downward price trend is over," noted Mr Kritcharat, adding that the short-term resistance level is $4,820 an ounce or 73,600 baht for domestic gold bars.

Following the increase of 65% in 2025, bullion has been under pressure from the Gulf war since late February, as high crude prices risk pushing inflation higher and increasing the prospects of elevated interest rates.

High interest rates tend to weigh on non-yielding assets like gold, which is traditionally seen as a hedge against inflation.

In MTS's view, gold is expected to trade in a range of $4,700–$4,855 over the next two weeks. Once it breaks above that range, the next key resistance would be $5,000, which is possibly seen in October.

"It largely depends on how long the Strait of Hormuz would be blocked and, once it is opened, how quickly oil prices would go down. If oil prices fall quickly, gold would recover at the same speed," Mr Kritcharat pointed out.

Factors supporting gold prices for the rest of 2026 include the remaining possibility that the Federal Reserve (Fed) could cut US interest rates once this year.

The US central bank is expected to maintain the Fed funds rate at 3.5-3.75% for the first meeting of the new chairman Kevin Warsh in June before trimming rates in either October or December.

The second factor is the dedollarisation trend, which would pressure the dollar in the long term given the US's high public debt. Finally, central banks around the world have built up their gold reserves amid ongoing economic and political uncertainties.

The Bank of Thailand, for instance, has increased its gold reserves to 11% from 2% of total foreign reserves before 2022, while some others now have gold reserves as high as 20%.

Varut Rungkhum, head of research at YLG Bullion & Futures, shares a similar view, saying that the chance is rare that prices could dip to $4,500 an ounce, supported by the fact that China's central bank has resumed gold buying.

The market is also bullish for a scheduled meeting between US President Donald Trump and his Chinese counterpart Xi Jinping on Thursday and Friday which is expected to deliver some positive news from the world's two largest economies, he added.

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- Gold price analysis

- Bullion market trends

- Federal reserve interest rates

- Global economic outlook

- Bank of thailand gold reserves

- Dedollarisation trend

- Commodity market forecast