Gold prices remain under downward pressure after United States President Donald Trump's statement on the ongoing military campaign in Iran, which dampened hopes of an interest rate cut. Analysts predict a key support range of US$4,400 an ounce and 66,900 baht for the domestic price.
Bullion retreated from two-week highs in Asian trade on Thursday following Trump's prime-time address to the nation late on Wednesday. In his speech, he said Washington would carry out aggressive strikes on Iran over 2-3 weeks, though it was nearing "completion of its main strategic objectives" in the conflict.
Markets reacted swiftly, with the 10-year US Treasury yield and the dollar index both rising, putting pressure on dollar-denominated gold.
Spot gold was trading at $4,606 an ounce early Thursday afternoon, down 3.72% from the previous session. The pullback followed bullion's climb to its highest level since March 19.
Locally, gold bars were quoted at 71,400 baht per baht-weight in volatile trade, with 40 price adjustments, according to the Gold Traders Association.
"Gold has yet to benefit from the Middle East conflict, as US bond yields have risen and SPDR Gold Trust reduced its gold holdings amid ongoing uncertainties," said Jaronvet Saksri, assistant managing director at Pi Securities.
Gold held above $4,500 an ounce, while Mr Jaronvet predicts a slim chance bullion can return to its peak of around $5,500 an ounce.
Despite the ongoing pressure, he said it is unlikely gold will fall to this year's low of $4,100.
"We see a key support level at $4,400 an ounce, with resistance now projected at $4,660. Domestic prices are estimated at 74,000-75,000 baht per baht-weight for resistance, and 66,900 baht for support," said Mr Jaronvet.
Gold fell 11% in March, its worst monthly performance since 2008, following the start of the war in Iran on Feb 28.
The surge in oil prices has fuelled inflation concerns, complicating the Federal Reserve's monetary policy outlook.
YLG Bullion & Futures and Globlex Research Department agreed that bullion remains under selling pressure after failing to break the resistance level of $4,800 an ounce.
"There is continued inflationary pressure following the rebound in crude oil prices, which reduces the likelihood of a Fed interest rate cut," YLG said in a research note.
Globlex noted the market is awaiting the release of US non-farm payrolls for indications of a potential Fed rate cut.
