The price of gold fell sharply. After market players became confident that the Fed is in no hurry to cut interest rates | Investing.com

Economic highlight

Highlights will be the manufacturing and services PMIs in the US, Europe and Japan, as well as Thailand's Q4 GDP report.You should also keep an eye on comments from key central bank officials (the Federal Reserve, the Bank of England and the European Central Bank).

**Gold price = COMEX gold contract for delivery in April.

Forex Spotlight

• The value of the baht fell after the dollar rose after market players became confident that the Fed would not be in a hurry to cut interest rates, along with foreign investors continuing to sell Thai assets. Pressure on baht volatility to decrease.
• However, we expect the baht's depreciation momentum to start to ease somewhat. Further decline may be limited to the resistance area of ​​36.20-36.30 baht per dollar. We should monitor changes in market players' views on the direction of the federal funds rate. Including the Bank of Thailand (BoT) interest rate trend.
• The opinions of market players on the direction of the Federal Reserve interest rate will depend on a report on US economic data such as the PMI in the manufacturing and services sector. (Manufacturing and Services PMI) including statements by Federal Reserve officials
• On the Thai side, reports on economic growth rates in the fourth quarter of 2023 will influence market players' opinions on the outlook for interest rates in Thailand. Recently, market participants estimated that the Bank of England may cut interest rates at least twice this year, following an economic recovery picture that was much worse than expected. Especially if there is a lack of digital wallet measures.
• Gold transaction flow is also a factor that can affect the value of the baht, and recently, the gold price has continued to bounce from the short-term support area. If there is some additional adjustment, this may encourage market players to gradually sell to profit from the rebound in gold prices. This will help slow the depreciation of the baht.
• As for foreign investor fund inflows, we believe there may still be some selling pressure for Thai assets from foreign investors. Both in terms of selling pressure in stocks and bonds, foreign investors may return to buying Thai assets if the Thai GDP report comes in better than expected.
• Technically, signals from both the Relative Strength Index (RSI) and MACD (daily time frame) indicate that the baht's depreciation momentum has weakened. This gives the fading a chance to swing sideways or strengthen somewhat.
• On shorter time frames such as H4 and H1, signals from both the RSI and MACD suggest that the dim may fluctuate and consolidate somewhat. Or at least it may swing sideways near the first support area around 35.70-35.80 baht per dollar. If the baht strengthens and falls below the level of 36.00 baht per dollar.

Highlight gold

• The price of gold fell sharply. After market players became confident that the Fed is in no hurry to cut interest rates. Before the gold price rebounds from the support area after an influx of buying from market players. And the period of dollar deflation
• This week, the direction of gold prices still depends on market players' opinions on the direction of the federal funds rate. Recently, market players have opined that the Fed may cut interest rates as few as four times this year, which is similar to the latest dot plot where the Fed is looking to cut interest rates almost three times.
• Gold price may fall to test the $1990-2000 per ounce support level again if market players believe more. The Fed may actually cut interest rates according to the latest Dot Plot.
• Be careful, gold prices may be very volatile as the market gradually receives important US and European economic data reports, including statements from key central bank officials including the Federal Reserve, the Bank of England and the European Central Bank.
• Technically, the RSI and MACD signals (daily time frame) indicate that gold prices are starting to have a chance to rebound further. Or at least swing sideways: Signals from shorter time frames like H4 and H1 suggest that the downward momentum of gold prices may be slowing somewhat. This causes the price of gold to fluctuate sideways or increase gradually. But resistance remains in the range of $2040-2050 per ounce.