Transcription
There is a solution for people who are stuck at the peak with 100 baht of gold. They already used 7 million baht for gold and are now stuck at the peak, you see. I stood watching the canal go down and felt sad—from 7 million, now it's 6 million. If you will use hedging, you won't lose more than this. >> Inflation is clearly adjusting badly. Bank of America does not see inflation as temporary. So if the hawks raise interest rates 3 times, how much will that affect gold, Doctor? If they raise 3 times, then let's consider that the worst case. And if they raise as many as 3 times, I believe there is a [music] chance of seeing the gold price go to $3,600. If it goes further, we will meet at 61.8% 8%—that would be even more severe, huh. Just look at the numbers, but I emphasize that it is >> $3,121, Doctor. [music]
>> Therefore, I analyze holistically that gold can fall for only about another 3-4 months, then it will stop around [music] [music] October, bottom out, and then start to stabilize. I still strongly believe that during November and December, it will turn back into an uptrend. If interest rates really rise a lot, where will we stop the risk? Or where can we accept the risk well without suffering? That is the issue I want to advise you investors. >> [music]
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>> If we forecast that inflation will fall, the question is: will the Fed raise interest rates? Right? Because if they raise, they will have to come back down later. It will fluctuate a lot and then greatly affect financial conditions. So I think they will not raise, and therefore I analyze that gold cannot fall much more because the fall of oil will be good news for gold. It's like today the market is starting to realize a bounce, but it might be a bounce from some news or whatever of oil falling, or it might be a technical rebound. Both are possible. So let's take it as neutral. Right now, for investors, my recommendation is to manage risk well. Right now, investing is not only about profit; consider risk. If it suddenly reverses and interest rates really rise a lot, where will we stop the risk? Or where can we accept the risk well without suffering? That is the issue I want to advise you investors. I emphasize again that in the Gold Futures market right now, there is a Mini Gold Futures contract that supports retail investors better—it reduces the size by 10 times from the original 10 ounces to 1 ounce. So you use less money. Using less money to invest means that if you understand, you might also use less money to manage risk. For example, if you hold gold, say 100 baht of gold, and you think you can only accept this much risk and don't want to risk it falling further—you might not be able to accept it—the method is to use a tool we call hedging to protect risk in the Gold Futures market by using Mini Gold Futures. Because Mini Gold Futures, you use only 14,000 baht to buy 1 contract or sell 1 contract, whichever. But this is the minimum amount. However, if I were to recommend, you should have about 60,000 baht to be safer. This is the lowest. So if it swings suddenly, you might get a margin call. There are many methods, I'm not saying you have to go one direction or another. But each person's portfolio risk management is different. I'm just saying that we have risk management that can help you manage risk and use less money. Suppose you have 100 baht of gold. The original value of 100 baht is about, let's say, assume stuck at 70,000, that's about 7 million, right? If 100 baht is about 7 million. So 100 baht of gold, 7 million baht, you can invest in the Gold Futures market and use money worth about 70,000 to 100,000, uh 1,500 to protect 7 million baht of assets. Like this we call hedging by going short futures against what you hold. But you need to understand that this is a risk management method that locks. It might lose on the upside, but it locks the downside risk. This is a starting point to give you a little idea: oh, is there a solution for people who are stuck at the peak with 100 baht of gold, used 7 million, and are stuck at the peak? You see, I stood watching it go down and felt sad—from 7 million, now it's 63 million? Actually, it should be 6 million. So if you will use hedging, you won't lose more than this: use about 1 million baht to protect 7 million. You don't have to use 7 million. This is a way of thinking in Gold Futures, but you need to study further. This is just a basic recommendation that there is a risk management method like this in the Gold Futures market. MTS Capital is a subsidiary of MTS Gold. We have been a broker for 16 years, huh. 16 years, so we are confident that we can give you advice. If interested, you need to open a Gold Futures account, study the risks, study knowledge, and then when confident, come and do it.
>> Very clear, Doctor. At a time when gold prices are falling, you also have a tool to help manage risk without having to touch the gold that you hold or that you normally invest in. Just by transacting or using the mechanism of the futures market, which can make a profit both when gold is in an uptrend and when gold is in a downtrend as well. This is the part about gold in the futures market and Mini Online Futures, which is a new form of online gold with a small size from TFEX, Doctor. That is the method for risk management in case that... Doctor, you think that Fed interest rates may be difficult to raise because oil is falling, so expected inflation will also fall. But if we ask you to consider a worst-case scenario for the market, because there is data from Bank of America's survey saying that the Fed might raise interest rates 3 times in 2020? Actually, they said in 2022? Let's see. Because they said inflation is clearly adjusting badly. Bank of America does not see inflation as temporary. So if the hawks raise interest rates 3 times, how much will that affect gold, Doctor?
>> If they raise 3 times, then let's consider that the worst case. And if they raise as many as 3 times, I believe there is a chance of seeing the gold price go to $3,600, as I just showed you the chart—going back to the chart just now, the weekly chart where we drew Fibonacci. This is a financial tool that technical investors understand. It is a tool that tells us at point 11, if the situation worsens, where will it fall to? So if there is a case of interest rate hikes, if it's 2 times, we already saw it, no need for 3 times. Because the ones analyzing 3 times seem to be only Bank of America. Most others see 1 or 2 times. As we showed you in the chart, it will fall to 50% first. 50% is about $3,600, according to the chart on the screen.
>> Yes.
>> If it goes further, we will meet at 61.8% 8%—that would be even more severe, huh. Just look at the numbers, but I emphasize that it is $3,121, Doctor.
>> Uh, let's consider this as theory, a theory that technical analysts worldwide use to know if it falls deeply like that, if you are an investor, can you accept it? If not, how can you protect? What tool will you use? As I just recommended, if we don't want to risk, we say just this much is enough. Oh, accept a loss of about 700,000 from 100 baht of gold? Can accept? Oh, accept at 700,000, don't lose more than that. Use the method of locking risk that we call hedging. This requires further study and opening another account. Regular gold shops cannot do this because they don't have a license. MTS Gold we have a license because it is a subsidiary company named MTS Capital. We are a broker in the TFEX market. This requires studying, coming to open an account, understanding, then you can start investing.
>> Yes, Doctor. But besides the effect in terms of the price declining, we look at it technically. Fundamentally, are there any statistics, Doctor, that when interest rates are rising, liquidity may decrease, financial costs increase, how will gold perform in a rising interest rate environment?
>> Uh, if so, you need to look back at 2022. I didn't show you, but I have done it before. In the past, in 2022, let me tell you. In 2022, the Russia-Ukraine war started in early February. At that time gold was around $2,000. Then with the war, gold went up about a week before to around 2,000 something, 2,001, 2,002 around there. Then after that, it affected inflation a lot. During that period, inflation rose quickly and strongly because Russia was forced to close oil pipelines, gas pipelines, close this and that. This caused trouble for Europe and America because Russia supplied energy and then it was cut off suddenly. Inflation surged to 9% in the United States in 2022. So that made the Fed change its policy from holding interest rates—at that time rates were low at about 2%—and they kept raising throughout the year. The first time the Fed raised, it was a 50 basis point hike. Like just now in our tool, we saw 14% expecting a 50 bp hike. In that year, the first Fed meeting was around April, I think, and they raised rates by 50 immediately. During that period, gold's wings were broken all year because...
>> Yes.
>>...they raised rates about 6 or 7 times that year, even until December. That year, gold went up earlier and gave a return of about plus/minus 4-5% at the beginning, but later it ended at -0.27% at year-end. That's not much, not much—minus 0.27. That was 2022.
>> Yes.
>> Then in 2023, when the Fed had a policy of holding rates and starting to adjust, in 2023 gold went up 13%. In 2024, gold went up another 35%. In 2025, last year, it went up 60-65%. What does that mean? When interest rates start to reverse direction—whether holding or turning downward—gold performs very well in that period. Now it's similar, but inflation is still rising slower than during the Russia-Ukraine period. Right now, US inflation is at 4.2%, which is still bearable. They still think that at the next meeting in late July 29? Actually, July 29? Wait, the text says "ปลายเดือน 29 กรกฎาคม" which might be a typo. Probably "late July". They still believe it might be held. While the rough forecast (numbers not out yet) is probably around 4.5%-5% US inflation. If it's around that, it's still bearable. But they still think that if they raise, it will start in September. September. But I myself emphasize many times that the numbers from the Fed's tool and such came out before the ceasefire agreement? Actually, before the war ceasefire? The text says "ยังไม่ได้เซ็นสัญญาจุดสงคราม" meaning "haven't signed the war ceasefire"? Or "haven't signed the war point"? Possibly "haven't signed the peace deal for the war". I'll translate as "before the war ceasefire was signed." So those numbers were released before signing the war ceasefire.
>> Yes.
>> Which I still consider worth thinking about. If they reanalyze at this point, it's hard to say because now it's difficult to reanalyze. The Fed hasn't come out together with all 9 members to state whether they still think the same or not. Because previously they made statements together after the Fed meeting on the 16th-17th recently. So they took these numbers to formulate various values, both the Watch tool and Bank of America also took these numbers to interpret. When they take these numbers, it must be this picture, correct. But I still emphasize that if we take the current situation to interpret...
>> Yes.
>> ...uh, the opinion would likely change a lot because oil has fallen by 20-30%. The old opinion would likely change, huh. Therefore, I analyze holistically that gold can fall for only about another 3-4 months, then it will start to stabilize. 3-4 months, it will stop around October, bottom out, then start to stabilize. And I still strongly believe that during November and December, it will turn back into an uptrend and start to recover. You ask why I believe? Because: 1. High interest rates are not beneficial or are harmful to the United States because at the end of the year they will have to review a lot of new policies and also issue new policies. Besides reviewing, if interest rates are even higher—now we know their debt is huge—they are trying not to talk about this at all. And de-stealing? Possibly "de-dollarization" or "debt"? The text says "de stealing" which might be a mishearing. Perhaps "debt ceiling"? I'll keep as "de-stealing" for now. Actually, it might be "debt ceiling" (เพดานหนี้) but written as "de stealing". Given context, likely "debt ceiling". I'll translate as "debt ceiling". Also "debt ceiling" should be full, and "n่าจะเต็มไปแล้ว" means it's probably already full. Then "ก็น่าจะต้องขยายต่อ" means they will have to extend further because they don't know how far it will go since they don't intend to repay. "คืนคืน" is a repetition meaning "repay". So: "the debt ceiling is probably already full and will have to be extended further because they don't know how far it will go since they don't intend to repay the money." And 4. The war has used about 1 trillion dollars. Where will the money come from to support it? Because they have already used about 1 trillion dollars. It's not easy to keep interest rates at a high level. Trump himself, as the government, is trying to say he wants low interest rates, wants to push rates down to stimulate the economy. But coincidentally, yesterday the US GDP figures came out good. Look at the chart, huh. The analysis team—it's like this, our world is mixed up. But we believe that the GDP that came out was very good, yesterday itself. 2.1%, from previously, see? Q4 came out very bad. Then suddenly it rose to 2.1%, which could be considered a recovery. But don't forget that the old level was around 3. So we have to watch further because if GDP is high, they might hold interest rates high too. But overall, don't forget that the unemployment rate is still high. 4.3%? Actually 4.3%? The text says "4.3% 3%"? It might be "4.3%". Unemployment claims are still at a relatively high point. That means many people are still unemployed, meaning the economy is not very good. So that's why I try to see that the Fed is more likely to hold rates than to raise, because if they raise, they will quarrel with Trump. I doubt they want to raise. Especially the new chairman who has been in office for less than a year probably doesn't want to quarrel with Trump because they have seen the severity of Trump's weapons. So...
>> Yes.
>> ...better not mess with him. [laughter]
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