Transcription
3,600 - 3,700 >> 3,800, about this much, probably not exceeding >> 3,900 dollars to 4,000 dollars >> 4,000 dollars, it also came down from 5,500, right? >> Here we see the gold price that is holding around 4,000, we can say it is breathing very faintly, the gold price is swinging at a level around 4,000 plus or minus, and then we are watching to see if gold risks breaking below the 4,000 dollar level, which is an important psychological point or not. >> We must admit that now the technical picture, uh, short, medium, long term, it makes the gold price bearish. >> When interest rates peak, if we buy gold immediately, and then we sell when interest rates fall to the lowest point, about 0.25%, 25%, we will gain from that, about nearly 42%. >> The gold price that is spot is in a sideways down condition, really still unable to make a new high, the gold price at the level of 3,900 dollars to 4,000 dollars, it should be very much the lowest of the year.
>> All of that, all the knots, it is inflation, that's it, high inflation raises inflation expectations, causing interest rates to trend up, causing the dollar to strengthen, causing gold to be pressured down, so the main trend we follow is the matter of inflation. >> The opportunity for gold to flow down continuously in the past period, how far will the price go down, why did it come down, and after coming down, it also raises the question, for people holding gold, what to do with gold now? Buy more or sell out, because the price has a chance to go down further, is it still possible to turn into an uptrend after running continuously for 3 consecutive years before life changed during the latest Iran war? >> Between 3,600 - 3,700, it should be the second important boiling point, important, if it falls from 4,000, in the case of worst case, it should stop here, for those who play Fibonacci. But in my view, I see that if it raises interest rates by only 4%, raising once, uh, might see about 3,800, 3,800, about this much, probably not exceeding, but if it happens 3 times, I think 3,600 will be seen. >> I see now around 3,800 - 3,900 dollars, for Thai gold I think it should be around 60,000 - 62,000 baht. Part of the reason it came down to the 4,000 dollar level, I think this round is also a result of the capital market itself being sold for profit taking in large quantities.
>> Which today, institutions may still be buying, but the ones that are definitely gone are the retail group, who today have no morale, I think that group will be quite difficult, so gold, I recommend that if you really want to hold a lot, I've said all along that you shouldn't put too much. If interest rates rise, how much will gold fall, and technically, if it breaks 4,000, what will happen? Our goal is to take this channel to 1 million subscribers. Please hit Subscribe. Now we have YouTube Membership, just sign up and you will get rights to watch content and exclusive seminars from PRP and Team Business Tomorrow. >> The gold price, we are rooting around 4,000 dollars, but Doctor, if technically first, how important is the gold price at 4,000? If it breaks, what signal will the technical graph indicate, Doctor? >> Um, we must admit that now the technical picture, uh, short, medium, long term, it makes the gold price bearish, and in the technical area, the 4,000 dollar area is considered an important support level for both medium and long-term investors on the 200-day moving average. Let's look at the chart where we drew Fibonacci retracement to show that in the worst-case scenario, if it falls heavily, now it has come to stop at the 38% area, right? I can't see the number clearly, but let's say that the 4,000 area is level 1 of Fibonacci retracement on the weekly chart, which is very long term, uh, it's the first point, it's the second point then, after falling, it should be able to hold, technically, that it comes to test here, if it holds here, it will bounce back up, if it doesn't hold and falls further from here, the next point to look at is the 50% line. The 50% line will be at about 3,600 dollars plus or minus, while the blue moving average line, if I'm not mistaken, is the 100-day line for weekly chart investors, which means very long term, it will hit around 3,700 plus or minus. That means between 3,600 - 3,700, it should be the second important boiling point, important, if it falls from 4,000, in the case of worst case, it should stop here, for those who play Fibonacci.
Now we are still not sure if the 4,000 area is holding, it is being tested, wiggling around here. Now let's look back at the technical side, look at the daily chart a bit to see what it tells us. The daily chart now, overall, doesn't tell much because it has broken below the 200-day line as well, it only tells that it is making a low and is in a condition that if observed carefully, the chart below shows no new low of MACD, still no new low, while price has a new low, so in this kind of picture, some might read it as beginning to have divergence in MACD, one could say, but the picture is not very clear yet, not very clear yet. Now let's look back at fundamentals, starting from where we discussed, the technical chart tells this, that if it is in a downtrend and then downtrend, if it breaks 4,000, it might go down to 4,600 - 4,700, and the indicator chart shows overbought or oversold, it is oversold already and might begin to reverse, but the reversal does not mean it will reverse direction immediately, it might reverse short term and then fall back again, so this only tells that short term might have some turns, short term, look at the 4-hour chart, see? The 4-hour chart is starting to reverse, see? There is clear divergence in RSI and also in MACD, there is divergence, and price is bouncing, so short term, it looks like there might be some bounce, maybe not much. Now let's look at the fundamentals happening at this moment, which is the attacks or the negotiations, basically, it should be believable that negotiations have succeeded, and Hormuz opens, oil falls, oil still swings a bit, but looking at the oil chart, it tells us something. The oil chart now tells that the overall picture of oil should be bearish, could go down further, but now it has come down a lot and is testing the level of 72 dollars on the Brent chart and then bounced, but the bounce is not much, and from the news, we can see that oil price has passed through the Strait of Hormuz. This is the oil price chart we can see that the chart is heading down quite a bit, heading down quite a bit, so in the falling oil price, we might hope that the inflationary pressure on the Fed should have a limit, meaning if we analyze that it will go up, now everyone knows because we have analyzed many times that it falls due to expectations of interest rate hikes. Let's look at the chart of what they analyze how it will go up, let's see. And oil, see that it is a chart with a clear downtrend direction. Now, the interest rate hike, this is from the Fed's perspective, which now the Fed has a perspective, using the Fed Watch tool, the tool thinks 38.6% hold rates, 48.8% raise a little, another 14.8% raise 2 ticks or 50 basis points. The picture here, the market interprets this, causing gold to fall. And from that news, 3 trading days from Monday, it fell and dropped all 320 dollars yesterday, and today it bounced back about 20 dollars at this moment, not sure if it will hold or not, but technically as analyzed, there should be a technical rebound, but it should be just a technical rebound, not meaning a reversal into an uptrend. Now let's look at the content of the interest rate hike, which in my personal view, I still analyze that if it hikes, it should be only once, not likely twice, because I believe in oil, oil will decrease.
Because if oil falls, it should cause inflation to adjust down quickly because oil dropped very fast, dropping a lot in just 2 weeks, down deep 30-40%. Inflation comes from oil; when the cause of oil disappears, I believe the series they analyzed comes from before the agreement was signed because we remember that when they analyzed whether it would hike once or twice, it came from the idea on June 17, but they signed an agreement on June 19, 18, 19 June, after that 2 days, so we need to watch this tool in about 2 weeks, the important number that should come out is the CPI. Certainly, I don't think CPI will drop, because, simply put, inflation will continue for at least 2 more months, but what is important that we want to see is the Fed's perspective on whether oil has fallen and inflation, which should fall. If the Fed analyzes how, will it still raise rates? Because I see that the statement about hiking rates, I analyze myself, should be less, should be less, and don't forget that at that time, it was the thought of about 9 out of 18 committee members, half and half. I still strongly believe that if oil falls and doesn't go up again, that is, falls below 70, which now is around 73, I believe the Fed might not hike rates. I use the word might; now I give weight to the same as they do, about a one-time hike, that is, in September there might be a chance. >> I think 50 is better, my heart thinks like that, I don't give weight over 50 because we follow the oil price mainly. If oil falls, it shows inflation must fall in the next 2 months, so if we predict inflation will fall, the question is, will the Fed hike rates? Right? Because if they hike, they have to come down again, it will swing a lot and affect financial conditions quite a lot, so I see that they won't hike, and therefore I analyze that gold cannot fall much more because the fall in oil will be good news for gold, it's like today the market is starting to realize it, bouncing up, but it might be a bounce from some news or from oil falling or...
>> It could be a bounce from a technical rebound, both are possible. So, broadly speaking, now for investors, the advice is to manage risk well. Now investing is not just about profit, think about risk. If it flips and rates actually rise a lot, where will we stop the risk or where can we take the risk without trouble? This is the issue I want to advise investors. I emphasize again that in the futures market now, there are mini gold futures that better support retail investors by reducing the contract size by 10 times from the original 10 ounces to 1 ounce. So you use less money. Using less money to invest means if you understand, you might use less money to manage risk as well. For example, if you hold gold, say 100 baht weight of gold, and you think you can bear this much risk and don't want to risk if it falls more and you can't take it, the method is to use a tool called Hedging to protect risk in the Gold Futures market using Mini Gold Futures. Because with Mini Gold Futures, you use only 14,000 baht to buy 1 contract or sell 1 contract, whichever. But this is the minimum money. However, to recommend, you should have about 60,000 baht, which should be safer. This is the minimum, so if it swings a bit, you might get margin called. There are many methods, I don't recommend a specific direction, but risk management of each person's portfolio is different. I'm just telling you that we have risk that can help you in risk management and use less money. Suppose you have 100 baht weight of gold, original value 100 baht is about, say, assuming at 70,000, it's about 7 million, right? If 100 baht weight, about 7 million baht. So with 100 baht gold, 7 million baht, you can invest in the Gold Futures market and use a capital of about 70,000 to 100,000 to protect an asset of 7 million baht. This is called Hedging by selling futures against what you hold. But this matter must be understood that it is a risk management by locking; it might lose on the upside, but it locks the downside risk away. This is a basic point to give you a little idea, like, is there an exit for those stuck with 100 baht gold, spent 7 million baht, and are stuck? I stand watching the canal fall and feel sad, from 7 million now left 6.3 million.
>> Like that, if you want to use risk protection, to not lose more, you use about another 1 million baht to protect the 7 million, not needing to use 7 million. This is a way of thinking in Gold Futures, but you need to study more. This is a basic recommendation that there is a method of risk protection like this in the Gold Futures market. MTS Capital, a subsidiary of MTS GO, we have been a broker for 16 years, 16 years, confident to give advice to you. If interested, you must open a Gold Futures account, study the risk, study the knowledge, and when confident, then come to do it. >> What is the factor that hit gold hard this round? >> Yes, let me use the screen. What I am about to discuss next is what many people are wondering about, the main issues. We must understand first that the Fed's interest rate hike makes the dollar strong because the dollar has been strong around 100, right? What I am showing you are 3 phases of understanding regarding interest rate hikes. Because the latest rate hike that is expected to happen, likely in month 9, we should see one, and then maybe month 12, another one. This is the heart of the matter, Guitar, that caused the gold price to adjust downward. But I heard you say, what about medium and long term? What are the chances? I must tell you first, I will show you the past of interest rate hikes that you see. There will be 2 charts: 1 is the black chart, which is the US interest rate set by the Fed; 2 is the gold price in red. Observe, Guitar, that every time interest rates peak, and after that, the gold price starts to follow. If we see this, it appears that 3 times from around 2006, 2019, and then 2023, every time the rate hike cycle ends, and they think it won't hike anymore, we see the gold price increase. And when they start to cut rates, like in 2006, when rates peaked, if we buy gold immediately, and then sell when rates fall to the lowest, about 0.25%, 25%, we will get a gain from that, nearly 42% profit. And then around 2018, when rates peaked at about 2019, around 2.5%, 5%, when rates started to drop, the price fell? Actually, the gain was about 23% for gold. And finally, during the various crises, during Ukraine, there were issues, and the Fed raised rates to 5.5, 5, now it has already gained about 120%. Every time the Fed raises rates and is about to start cutting, it is a positive signal for gold. The question you will ask me next is, then how many times will the Fed raise rates? At this moment, what we are looking at is the US interest rate has 2 lines: the first is the solid blue line, and the second is the dotted line. The dotted line is the forecast. Yesterday, there was a forecast of 2 interest rate hikes this year, in September and in November? December? September and December, 2 months of increase, with the peak not exceeding about 4.25-4.5%, 15%, consistent with Bank of America's forecast of 3 hikes. Why? Even though Trump people, elected into office? Actually, if I explain backwards, you will see the picture clearly. Powell was elected, and he didn't follow a 100% rate cut policy, Guitar. We saw that sometimes, just because we elected him, he might not do what we want.
>> So I explain like this, Guitar: this year's interest rate, we might see a peak at about 4.25-4.5. After that, as we said, it is the point to buy gold. And as we said, the point to buy is when the market starts to believe that the economy will slow down due to the high rates, which increases financial costs, real estate, investment, consumption all slow down, and we will hear the phrase "Soft Landing," they like to use it a lot, Soft Landing, but not sure if it's real, because this round might not be soft. >> Yes. >> If it's not soft, Guitar, gold will rise even more strongly. That's about it, the picture you asked me about. >> Uh. >> Yes, but then, from your own view, what is the actual likelihood of interest rate hikes? Because looking now, the problematic root cause of inflation, like oil, is gradually coming down from a peak of 120 down to just over 70, a level close to before the war. >> Uh, yes. I must say this: what we want clients to focus on is to look at inflation, because inflation determines interest rates. From what we see ourselves, on the US inflation side, this is forecast by the Fed itself. They forecast that PCE will be around 3.6% and core PCE excluding food and energy will be at 3.3%, and the Fed forecasts one interest rate hike. If I see this, I assess that in the next meeting or month 9, they will likely come out with a single rate hike, Guitar. >> Yes. >> Meaning we will see rates at about 4%, that is the high of rates after this. If that is really the case, the rate hike might happen in month 9, and after that, there will be nothing. But I must say first that the Iran-US issue is not something that will end easily, because it is tied in many ways, whether it's the Iran-US negotiations themselves, which involve the prisoner exchange and Israel as conditions for negotiation, making stability difficult. This is a very thin point, need to watch especially. But in my view, I think energy prices will not increase like the first conflict. Why do I think that? For example, Thailand used to get fuel energy, both gas and oil, from the Middle East a lot, but later we went to Russia, we went to America more. Every country thinks the same, for sure, because we can't rely on opening and closing like that. I think that energy prices won't be as high as the previous closure because people have diversified risk. Instead, the countries that will suffer are the Arab countries, because they will sell less since everyone is afraid to order, not knowing if they will really get oil. That's what's happening. So I agree, Guitar, that inflation increased from energy prices, but let me observe this a bit: the inflation we discussed is starting to spread to many categories, such as paddy rice, currently high prices all the time, and things related to soybean oil, rice, rubber, all high. Why does that happen? It must be said first that it comes from higher freight costs because shipping everything.
>> Yes. >> And freight costs are affected by spending on insurance, quite a lot. We must understand that when insurance costs increase, they pass on the burden, and we see freight costs expensive, simply like oil prices going up, we suffer high transport costs, same picture. I am worried about freight costs because large-scale transportation is mostly by sea, and small-scale transportation by plane, in between by car and plane. I am only worried about freight costs, Guitar. >> Uh. >> Now, on the inflation side, there is talk of new inflation from the AI side because chip prices are expensive, causing the prices of materials and equipment using chips to be expensive too. Recently, Apple just raised product prices, some by 25%, and we might see this pattern again among other gadget manufacturers. Do you see this as an upside to overall inflation that could cause obstacles to interest rate hikes, how much? >> There is a high chance. I must say first that initially people didn't know chips were expensive, only found out last night when Apple announced. >> Yes. >> And they said it's a risk they don't accept and they pass it to you. You will see that most stocks that fell, or markets that fell, include chip-related countries like Japan, which sells a lot of chips, right? Today it fell 4%. South Korea, oh, that also has chips. And inflation, I have another funny story that I read and found amusing. >> Yes. >> South Korea, they gave bonuses to Samsung, and it caused inflation in South Korea because Samsung gave bonus money, and people spent lavishly. So I say, oh, with lots of money, they didn't save, they spent, they know how to spend. And finally, Taiwan. Notice that these 3 chip-producing countries, with chip manufacturing sites, all fell. But in our country, we don't have chips? We do, but few. Our country has Delta, KCE, Hana, but their market cap is not global. If we count globally, not just Thailand, they didn't fall much. And countries with no chips at all, like Malaysia or others, they didn't fall much either. This shows that the impact this round comes from concerns about chips. I will tell you it also relates to gold. Why does it relate to gold? In terms of gold, we are communicating that the market itself sends positive signals to gold during this time because gold has 4, has 5 structures: 1 is the global economy, which we understand now is looking good on the chip side, but there is a part, investor confidence in the economy. At present, we know chips are expensive, we might see chip prices rising, affecting the chip group and affecting income. The day before yesterday, I saw one company that announced good earnings, I can't remember the name, A MU? I can't remember the full name. >> Ah. >> Yes, Micron? They announced good things, but today it went down. I must say it changes quickly, and this declining investor confidence causes people to start accumulating gold. But I must say first, it's just a bounce because the big picture is the interest rate hike waiting in month 7, month 9, month 10, month 12. Not every month, but everyone, when approaching the Fed meeting, feels pressure like, "I better sell first in case rates go up, I'll be screwed." That's the angle, Guitar, regarding chips affecting gold.
>> Yes. And from your view, if interest rates can still rise, and if they rise a lot, 3 times in month 7, month 9, month 12, how much more can gold's downside be, Mr. Han, from the current level that has already fallen 200-300 dollars from the bounce point? >> In my own view, I must say this: the dollar, when the Fed raises rates, it makes the dollar strong, and the dollar is one thing used to buy gold, it's the main currency to buy gold. What worries me in fundamental terms is not answerable because the calculation of mine costs doesn't work. I'll answer technically. Now I see the lowest point of gold if there is any action this year, it's at 3,650, Guitar. >> Uh, I see it as the low of this year. >> Can you give the source of that number, from 50? Where does it come from? >> The source, okay, the source of the number comes from drawing a trendline at the lower side of gold price, which is analysis of gold. Technical analysis, there are 3 types: short, medium, long. Short, we analyze price from about 2 weeks to 6 weeks. Medium is 6 weeks to 9 months. Long is 9 months to 2 years. This view, we are drawing a long-term trendline, so we see that it does not break the support, and drawing up, the 2 green lines that are important support are trendlines from the perspective of a sideways-up movement of gold. So we take that sideways range as a support level this year, Guitar. >> Uh. >> The support point at 3,650, is that the deepest possible point, or is there another critical point, Mr. Han? >> At this moment, in my view, this is the deepest point, but in case I am wrong and it breaks below here, I worry that we might not see 3,000 if it falls further because people will panic a lot and will dump it, similar to 2013 when gold made a high and then started falling. That is one point that aligns with what we discussed earlier, because around the 2013 zone, Guitar, when we discussed earlier, it was a period when people started to think the Fed would have to start raising rates, and it aligns in the reverse sense, meaning when people start to think the Fed will start raising rates, gold starts to fall because the downside starts to strengthen. It's a similar picture. But in my view, I think if it raises rates by only 4%, raising once, uh, might see about 3,800, 3,800, about this much, probably not exceeding, but if it happens 3 times, I think 3,600 will be seen. >> Hello, Doctor. Now gold is falling heavily. At the beginning of the program, we asked if 4,000 would hold tonight. But more importantly, we need to know the cause of the fall, falling heavily 60-70 dollars a day until it is about to break 4,000. What is the pressure this round from, Doctor? >> I think mainly it's the picture from the latest Fed meeting about a week ago. Investors actually expected that the new Fed Chairman, Mr. Kevin, would follow the policy of President Donald Trump, which is to ease interest rates to stimulate the economy. But it turned out that in the first meeting, Chairman Kevin Watch instead emphasized inflation as the main thing, leaving a statement that if inflation remains at the same target, still wanting 2%, that made investors look back, thinking, "Oh, so the Fed, regarding rate cuts, must forget about it." They then looked at the statement that it might be possible to raise rates again. Now, various analysts see many patterns. Recently, there is news that the Fed might raise rates twice this year, around September and around October, uh, December, twice. Wow, strong selling across assets came out completely. Gold itself, gold, silver today also fell very strongly, sold out completely. It's the opposite, called Against the US Dollar when trading, and it got sold off. Recently, Goldman Sachs said that it might be able to raise rates up to 3 times. Wow, then even more panic. Even though there was some good news from the Iran negotiations, it caused gold that fell to a low last week at about 4,020 dollars to bounce back to nearly 4,380 dollars. But after that, no matter what news, it was overshadowed by news about the Fed's interest rate policy, and it has been falling from 4,380 down to currently about 4,050 dollars. But if we start from the cause traced back to interest rates, from your perspective, Doctor, how likely is it that the Fed will raise rates this year? From maybe just 1 time, and then big houses talk about more than 2 times or 3 times. >> Personally, I think at least regarding the rate hike, we must consider the expression of President Donald Trump a bit. >> Yes. >> Because if we look since he took office, I have never seen him agree with raising rates or keeping rates high. He only said that the Fed Chairman must cut now, don't be lazy, etc. If we listen to what he always says. Therefore, personally, I think that the current rate level of 3.75% is already high enough that if the various wars end, oil prices return close to, not saying to the same level before problems, but close enough, falling a bit, so that trade can proceed normally, transport, energy return to normal, I think the US economic numbers, whether inflation, employment, etc., will reflect a good picture after oil prices normalize. I think that ultimately, the numbers, inflation numbers, will also normalize. Because if we observe, the inflation that occurred mainly came from the severe increase in energy prices in the US. So the reason they cannot do anything about rates currently, I think President Donald Trump himself wants to cut, but cannot because inflation comes from war conditions. Certainly, he is trying to end the war as quickly as possible. After we discussed many times that he tries to do everything quickly, and recently, even though late last week there was talk that they could not agree on opening the Strait of Hormuz, eventually he himself, along with the Vice President, came out to warn Israel to return to the negotiating table, and everything has been resolving positively. Therefore, personally, I think within 3 months, let's look at the economic numbers; if they improve, I think there is no need for the Fed to raise rates at all. I see that staying at this level until the end of the year is already very high.
>> But in the worst case, Doctor, if rates really have to rise to adjust inflation or maintain price stability as the new Fed Chairman said, how much will the impact on gold be? What is the statistic of gold when interest rates are rising? >> Actually, I must say that gold does not always depend on a rising rate environment. Because we saw that in 2022, rates were also in a rising phase after COVID, but then the Russia-Ukraine issue came in, causing gold to adjust higher and make new highs continuously over the past 3 years. Therefore, I think that interest rate conditions will be short to medium-term news as a pressure at this level, but personally, I think the gold price at the level of 3,900 dollars to 4,000 dollars should be very much the lowest of the year. Personally, I still think that if nothing goes wrong, first, the interest rate condition should be relatively stable, and second, gold itself is currently in a somewhat panic state. Actually, if we look at the technical chart, the spot gold price is in a sideways down condition, really still unable to make a new high. The latest high in the past week could not pass around 4,200 dollars, causing selling pressure. Now we need to see if the gold price at the 4,020 dollar level, which is the low, can hold. If it can hold, I think there is a chance to recover, a sideways picture between about 4,000 dollars to 4,400 dollars, roughly like that.
>> But if it cannot hold, what is the price direction or how deep is the downside, Doctor? >> Yes, I see now around 3,800-3,900 dollars if it breaks 4,000 dollars. Then the picture would be about, for Thai gold, around 60,000? I still think it won't break 60,000. For Thai gold, I think it should be around 60,000-62,000 baht if the old support was at 62,900 baht. If Thai gold makes a new low, I think it would be around 61,000-62,000, and I still think it should not break 60,000 baht. >> Yes, that is from interest rate factors and technicals. Now, besides interest rates, there is talk about managing liquidity, which is a tool. In the past 12 years, during gold's heavy falls, I understand it involved both the reversal of interest rates and liquidity absorption. That time, gold fell heavily. This round, the new Fed Chairman seems to have a policy against QE and seems to want to manage liquidity. Is there a risk that he will do QT? And if so, will it affect gold like the big fall around 2012 again? >> I see that at this moment, the gold price reflects the policy of reducing the amount of money injection by the Fed already. Personally, I think that in this zone around 3,900 to 4,000 dollars, that is the zone from when they sold from about 4,700 dollars, 4,000? 4,700 dollars we discussed recently, right? And then down to 4,500, then broke 4,300 down to near 4,000 currently, I think they have already adjusted to the policy of small QT. >> Yes. >> Personally, I still think that the gold price should be close to being able to stand at a price that can reverse upward somewhat. Personally, I see the gold price as likely to be sideways. >> Yes, and on the reversal side, what factors will drive it upward, Doctor? >> I still look at central bank purchases as well. This point is still interesting because when the various wars start to calm down, if you remember last time we discussed, we talked about sales by Turkey, by the central banks of Turkey, Russia, etc. Clearly, Turkey sold a lot because they also bought a lot to manage their lira exchange rate. Personally, I think that when the war truly calms down, like now, I think at least another 60 days, there should be buying back from various economic expansions, with expectations that the war will end and economic activities return to normal once. Therefore, the purchase of gold as reserves, I think, remains a positive factor in the long term. If we look recently, late last week, the World Gold Council conducted a survey that found, if I'm not mistaken, about 80 something percent? 80 something respondents? More than 70 percent of the sample thought that their central banks would buy gold next year, increasing. Therefore, if we look, the positive factor of gold purchases as reserves has been there for 10 years.
>> That supports the gold price to adjust higher to this extent. Because if we look 10 years ago, we would find that gold as global reserves, from various banks, was bought at about 500 tons. Compared to 10 years later, this 10 years, it increased 2 times, about 1,000 tons approximately. Therefore, this is why in the long term, after removing other factors, there is still a group of central banks interested in buying gold as reserves to reduce the risk of the US dollar as well. Thus, this should be one important factor. Another factor is the cessation of war. I think there should be positive factors. I think in the most recent period of decline, part of it likely involved selling of various stocks, tech stocks, as well. Certainly, when stocks, capital markets, are sold off, the part they can take profits from, they have to sell too. So part of the reason it came down to 4,000 dollars, I think this round, is also a result of the capital market itself being sold for profit taking in large quantities, whether in Korea or US stocks, AI stocks, etc. This is a side effect of profit taking on global assets. >> The strong dollar affects everything, too. One thing we see heavily affected is gold; the price fell until at some points it broke 4,000 dollars. Although gold might see positive news from falling oil prices and falling inflation, during a strong dollar, gold still falls. Brother Rose, how do you view the effect of the dollar on gold? >> Dollar and gold, directly, because they are substitute assets. If the dollar strengthens, gold falls. And over the past 2 months, since the war, the dollar has been strengthening steadily, gold has been sold steadily. This is general understanding that I think everyone knows. The important point of this matter is, what will be the direction of the dollar next? Actually, when the war started, the dollar strengthened. When the war is about to end, the dollar should weaken. But for some reason it doesn't weaken, which is that when the war ends, people find something else to worry about, like inflation from the Fed. That's one thing. And when technology products start trying to raise prices themselves, there is inflation worry, and it goes back to the same story. I think all points, all knots, it is inflation. High inflation raises inflation expectations, causing interest rates to trend up, causing the dollar to strengthen, causing gold to fall. So the main trend we follow is inflation. It depends on the camp; some camps believe inflation will go up to 4%, stay at 5, not come down. But I am not in that camp. I think that although consumer electronics will rise, consumer electronics are not things we use every day. If the price rises sharply today, we don't buy, we can wait. It's okay, you go up, I won't buy. Eventually, it must adjust itself with oil prices and consumer goods that are tied to oil prices, which are about to fall. I have to see the effect. Because I think ultimately, I might be in a different camp from general analysts who might see 2 rate hikes this year, some say 3 times this year. I think with the disruption situation, people generally don't have jobs; overall, it should decrease. In America, there has been an increase in the past, but I think layoffs are also high. That is something to follow. And regarding inflation, if it comes from consumer goods themselves, it will decrease. If it is a cost-push issue, we have to see who else will raise prices further. But ultimately, I think it won't be severe and stay at 4% as currently; it will come down. And if we see the number 3 or low 2, then I believe at that point, the worry about interest rates will disappear. Before the war started, the market expected the Fed to cut rates once, inflation expected around 2.5, at that time it was 2.9. Today inflation is 4.3. Three months from now, it should come down, but still high. If inflation goes back below 3, then policy rates don't need to be raised, everything will return. I think investing is about the future. If we talk about today and explain what happened last week, it's very easy, whatever you say is correct. But we are talking about the future; we have to look forward, what next? Will inflation stay forever? Will rates really rise? I am one person who doesn't think the Fed will raise rates twice, but I could be wrong. Everything is analysis.
>> Yes, but then, if we come back, if Brother Rose sees that inflation won't last long and the chance of rate hikes won't be higher than this, the dollar should weaken, and the effect on gold should decrease, right? In the past, gold's big buyer, China, kept buying all year, historically, especially in the last 2-3 months, like when the war ended. So central banks that might have been worried about war needing funding for special purposes will also decrease. So the only remaining pressure on gold is inflation and rate hikes. Therefore, if the direction of rate change reverses or decreases, gold will gradually return. Today, gold at 4,000, right? 4,000 dollars, it came down from 5,500, right? Fell 1,500 dollars, that's 30%, right? From the peak, it is a correction that has fallen to a certain level, quite deep already. I think the selling that occurred in the past has already pushed part of it. So if there is a change in the inflation outlook, it can come back. But I think it's hard to answer at what point people will start to believe inflation will decrease. The fastest is next month, around week 2, the June inflation numbers. I believe it will decrease, and that will help reduce the worry. So for gold, when we move to next month, the selling pressure... >> And in terms of portfolio allocation, is gold still the best diversifier? Or is it still a tool to spread risk and reduce risk in the portfolio? >> No matter which dimension you look at, gold is a diversifier in every textbook. The problem is we often allocate too much weight. When we see it rise, we put half, 30%. Actually, for a diversifier, I recommend only 5%, at most not exceeding 10%. If it is in a suitable proportion and we hold it long term, I think its volatility or crisis correlation with other assets will help theoretically. But in the past, we often didn't use it as a diversifier; we used it as a profit source. So we feel that when it falls, it hurts. Actually, if we look at the picture, technology stocks went up, gold went down, it was doing its job, right? But we might have used it for speculation too much, so we encountered problems.
>> Yes, so in terms of being a diversifier for the portfolio, we don't need to panic or change the weight of gold investment in the portfolio, right? But for those who see gold as a value creator for the portfolio, that needs to be reconsidered. >> They might be disappointed in this regard. But...
But if we say we are going to diversify, we really have to diversify. I mean, when we look at the portfolio, Guitar, we should look at the entire portfolio. We shouldn't look at each point of the whole portfolio individually, because otherwise there won't be the word "diversify" in the portfolio at all. You have to make a profit on every single thing you invest in all the time. Like this, you are making a profit all the time, and you are not actually managing a long-term portfolio, right? This is about principles first. People think that when we look at the big picture, we have to see that, hey, if we don't invest a lot, it's okay. Actually, if it performs its function, it's fine. If it just keeps going down for 10 years, like some assets, that's okay, right? I think it can go up and down; you can't define it too much. But if we put in too much, 10%, 15%, then we start to get worried, and it's no longer a diversifier; it starts to become a source of return. Then we have to look at whether we are suitable to hold that much. Normally, I do not recommend holding gold in a very large portion because, in the end, gold has no profit, no growth. It's just a psychological value that each of us holds, that's all.
>> Yes, but the fear of the moment when gold drops hard and for a long time, like in the 2012 period, and then sleeps for 5 years, 6 years, that is starting to happen now during the period when interest rates may rise, inflation may rise, or maybe they will do QT, right? Rose, how do you see this picture?
>> Gold itself in history, its cycles are long, right? It will stay like Guitar said, 5 years, 10 years going nowhere – that's possible. But in the end, it can all come back. So if we say it's, uh, cold cash that we hold, we are not in a hurry, we don't need to use it immediately, then it might not be too troublesome. But if someone has invested a lot and feels it is the majority, I think we have to seriously analyze the trend of gold. And gold is hard to analyze; it has no profit, no trend we can follow except who buys and who sells, which today may still be buying. But the ones definitely gone are the retail group that no longer has the morale today. I think this group will be very difficult. So gold, I recommend not to hold too much. I've always said that you shouldn't put too much in it. But today some people may have already put too much, so we have to look and see, hey, where does it fit in our portfolio?
>> Yes, finally, Roj, besides gold, the non-tech group, the value group, the economic recovery group, we also see money flowing into this group too during heavy tech sell-offs, right? Roj, what do you recommend for the non-tech side?
>> Non-tech and tech have been alternating all along. In the recent period, we see that in weeks when tech drops hard, these groups come back, including software. It goes like this: when the market rises to a certain point, when taking profit and not knowing where to go, they move into things that haven't risen yet. So we see these groups benefiting periodically. But non-tech itself also needs to be looked at in detail because if it is non-tech that is physical, it might still be okay because it can go up and down. But if it is non-tech that is being disrupted, this one will definitely not come back. I think we have to separate them well. But some industries may be certain that consumption, eating, using, and tourism are cycles that come and go. So during bad times, money goes into this group because they have a time to come back. Or like healthcare, we often hear people talking about it; it's also a part that people believe that, no matter what, people have to use healthcare as they age. This is always true. But if we look at the past 3 to 5 years, its performance is at the bottom of all industries. So I think now it is a diversifier, a safe period for volatile markets. But when the market turns back into a bullish market, in the end, profits will grow in technology because it is an innovation that we are willing to pay for. We won't pay for something we already know and have. We always want new things. I think if we are looking for growth, profits are not in this group. But you have to be very strong-minded; you have to be able to hold long-term and get through things like this. Otherwise, moving over for now might give you peace of mind, and then when it's time to come back, it's also fine. I think there are many ways to look at it. In the end, if the market is still growing, profits are still growing – tech or non-tech – the economy has to keep growing, right? It's been proven for 100 years; the stock market always comes back.
>> Today is a red day in the Asian stock markets. The markets are falling heavily, especially in South Korea and Japan, due to tech stock selling that continued from the US stock market last night. An interesting point at the moment when stocks are falling heavily is that the dollar has been strengthening continuously. Yesterday, the dollar made a new year-to-date high, and the strengthening dollar is impacting various assets that are correlated with the dollar, especially gold. Today we see the gold price hovering around 4,000, barely breathing, really. The gold price is swinging around the level of 4,000 baht? Actually it's dollars, but the speaker says "4,000" – likely referring to USD. So: the gold price is swinging around 4,000 dollars. And we are watching to see if gold is at risk of breaking the psychologically important 4,000 level. The futures market price is now 4,032 dollars, down 15 dollars, or 0.37%. As for the spot market price, it is around 4,025 dollars, dropping lower in the morning to around the early 4,000s exactly. For the gold price that has fallen in the global market, it also puts pressure on Thai gold as well. But for Thailand, there is also the factor of the baht weakening. For Thailand, gold that has fallen has a chance to recover today. Today, the Thai gold price has increased by 600 baht per baht of gold, with the selling price at 60,000 baht? Actually the text says "60,000 13,650" – seems like a typo; likely 60,000 for selling and 13,650 for buying? Let's translate as written: the latest Thai gold price is up 600 baht per baht of gold, selling at 60,000 baht? Actually it says "60,000 13,650 baht per baht of gold" – probably "60,000 baht for selling, 13,650 baht for buying"? But that doesn't make sense (60k vs 13k). Could be "60,000 and 13,650 baht per baht of gold"? Possibly "60,000 baht for a gold bar (one baht weight) and 13,650 for...?" I'll translate verbatim: "60,000 13,650 baht per baht of gold". Let's preserve: "60,000 13,650 baht per baht of gold". Then: We will follow the direction of the gold price after the price has had a chance to fall continuously in the recent period. How far can the price fall? Why has it fallen? And after falling, it raises the question: What should those who hold gold do with gold now? Should they buy more because the price has dropped, or sell because the price has a chance to fall further? For those who are holding and intend to sell, should they sell now or not? Because holding it, they are not sure if gold can rise more than this, since after it rose to an all-time high at the level of world gold at 5,600 – Thai gold at 80,000 – it has never gone back to make a new high again. And the stock markets of Asian countries that are heavily focused on tech stocks are also falling severely today. The Japanese stock market has fallen by about 3,000 points, and the South Korean stock market is down about 4%. Today, Asian markets are facing very heavy selling. Heavy selling both in South Korea (KOSPI index), in Japan, and in a major Japanese stock like SoftBank, which fell up to 12% today. The picture of heavy selling overall has caused market value to disappear by about 1 trillion, or 1 trillion US dollars, in just a few hours. For today, Taiwan stocks are down about 3%, Japan stocks down 4%, China stocks down 2.15%? Actually "2.15% 5%" – likely 2.15% and then another? Possibly 2.15% and the selling is spreading. The selling pressure is now spreading across the whole region. Thai stocks also had a moment of heavy drop of about 16 points, or 1%, as well. What were the issues going back to last night that happened before stocks fell from the NASDAQ board to all of Asia this morning? There was the US PCE report, where inflation still came out high and steady. The US inflation figure, PCE yesterday, if the headline inflation figure was up 4.1%, the core PCE inflation figure was up 3.4%? Actually the text says "3.4% 4%" – likely 3.4% for core and 4.1% for headline? Then: Even though it was close to expectations, it is still higher than the Fed's 2%. Besides the PCE, there was also news about Apple raising prices on important products. Apple announced price increases on key products in the Mac line. For Apple, there are price increases on MacBook and iPad after chip costs rose. Apple said that this price increase is unavoidable and they can no longer bear the costs because chip prices have surged sharply due to high demand in the AI industry for training models and developing AI. Now, the rising costs are being passed on to consumers. When costs rise, people start talking about what is called "AI inflation" or inflation coming from AI. When people fear inflation, they fear the Fed raising interest rates. The issue of rate hikes is an existing concern since the last Fed meeting. The first meeting under the leadership of Kin Watch? Actually "Kin Watch" is likely "King Watch"? Possibly a name? And D Plus? It indicated that there is a chance of one rate hike this year. After that, the market began to have more expectations of rate hikes. Bank of America? Actually "Bงค์ ofica" is likely "Bank of America" – looks like a typo. So: Bank of America sees that interest rates could rise up to three times from inflation that has seeped deep into the system and is not temporary. This issue has caused us to see heavy selling still in tech stocks, global stock markets, and the dollar rallying. Now, the dollar has broken above 101 for the Dollar Index. And when the dollar strengthens, the asset where we clearly see the impact is gold. Gold has fallen heavily since after the Fed meeting, dropping continuously by about 300 dollars. There was a moment when gold broke 4,000 the day before yesterday. Now it is still holding on the line at 4,000 dollars. So during this period, we analyze both fundamentally – how much pressure gold will face from interest rates, if rates rise, how much gold will fall – and technically – if it breaks 4,000, what will happen? Additionally, in the long-term picture of gold, is there still a chance to return to an uptrend after running continuously for 3 consecutive years before a life-changing event during the recent Iran war? Thank you everyone for following us all along. Our goal is to take this channel to 1 million subscribers to build a broader learning community for economics, business, and investment. And if you don't want to miss good content, please hit subscribe. For those who want to upgrade their knowledge in depth, we now have YouTube Membership. Just subscribe as a member, and you will get the right to view exclusive content and seminars from P'Roj and the Business Tomorrow team. Please join us in supporting us to create good content to increase knowledge and enhance the financial lives of Thai people together.