Gold Falls from 80,000 to 60,000 in the First Half, with Hopes that Central Bank Buying Will Support Prices in the Second Half

Gold prices were highly volatile in the first half of the year, hitting an all-time high of 81,950 baht per baht-weight before easing to around 63,300 baht. The Gold Traders Association expects prices to gradually recover in the second half, with buying from central banks around the world a key factor supporting prices.

KEY POINTS

• Gold prices were highly volatile in the first half of the year, hitting an all-time high of 81,950 baht per baht-weight before easing to around 63,300 baht
• The early-year surge was driven by geopolitical tensions that boosted safe-haven demand, before U.S. Federal Reserve signals of a slower pace of rate cuts pressured prices
• Prices are expected to gradually improve in the second half, with buying from central banks around the world a key factor supporting prices

Thai Gold Surges to a Record Before Heavy Selling in Q2

Gold prices in the first half of 2026 (Jan. - Jun.) created a new history of extreme volatility, soaring to an all-time high and breaking the global record at $5,589 per ounce, pushing Thai gold to an unprecedented peak of 81,950 baht per baht-weight in the first quarter before facing a storm of heavy selling in the second quarter and plunging below key support levels.

At the historic peak on 29 Jan. 2026, global gold reached $5,589 per ounce. Thai gold bars, according to the Gold Traders Association, had to be adjusted up and down as many as 75 times in a single day and hit the most expensive level in history at 77,900 - 81,950 baht per baht-weight, up 9,250 baht from the previous year-end close. In February, gold remained at elevated levels, rising another 3,400 baht, supported by ongoing geopolitical tensions and unrest in the Middle East, prompting investors to buy as a safe haven.

Prices then moved in a sideway-down pattern, with the average domestic bullion range easing to around 70,550 - 73,300 baht. The heaviest sell-off came in June, when prices dropped more than 6,700 baht, making it the most turbulent month and the lowest level of the year. Gold broke through key support and traded around the $4,000 per ounce area, within $3,970 - $4,190 per ounce, causing Thai gold to be shaken sharply.

The first-half close on 30 Jun. ended with a buying price of 63,100 baht and a selling price of 63,300 baht, in line with global gold at $4,037 per ounce. The second quarter also saw a correction. Overall, the volatility seen early in the year was mostly driven by global uncertainty, especially the still-unclear war situation.

U.S. Inflation and Fed Signals Pressure Gold in Q2

By March, the market reached a major turning point, with a sharp correction of 6,400 baht and the steepest gold drop in years. U.S. inflation rose along with crude oil prices, leading the Federal Reserve to signal a slower pace of rate cuts. That pushed the dollar and bond yields higher, continuing to weigh on gold throughout the second quarter. In April and May, prices still trended lower, falling another 1,200 baht.

Looking back at the first half of 2026, Jitti Tangsitpakdee, president of the Gold Traders Association, said the gold market became a historic source of extreme volatility, producing record-setting "New High" and "New Low" levels. In particular, on 29 Jan., prices surged to a new peak, forcing investors to adjust quickly to a world that changed day by day.

Second-Half Recovery in Sight on Central Bank Buying and Buy-on-Dip Strategy

Looking ahead to the second half, although short-term uncertainty remains high because of the Iran war, prices are expected to gradually improve from the third quarter onward, supported by strong buying from central banks. Major central banks around the world continue to accumulate gold, selling dollar bonds and shifting reserves into gold instead, showing that they are not concerned about gold price levels.

He also believes the Fed is unlikely to raise interest rates, because the U.S. government carries such a heavy debt burden that it may not be able to absorb higher interest costs. That would be directly positive for gold, and if the U.S. economy starts to run into problems from a prolonged war, it could further accelerate the move toward gold reserves.

Seasonal factors also help toward the end of the year, as gold funds typically increase their gold holdings. Even though many gold investors are still worried that Thai gold may fall below 60,000 baht, Jitti said it is unlikely to break that level, based on price behavior that has shown strong resilience. Even when prices fell to $3,900 per ounce, they were able to climb back above $4,000 per ounce.

As for the previously projected Thai gold resistance target of 90,000 baht, it still remains possible, but the timeline may have to be pushed back from late this year to early next year instead, due to the war lasting longer than expected and continued volatility from aggressive futures speculation, such as in China, where trading has become almost like gambling. Chinese authorities are using strict laws to control it, and this remains an issue Thai investors must watch closely and approach with caution.

The association insists that imposing a trading tax would set the Thai gold industry back and harm regional competitiveness.

Thanarat Pasawong, CEO of Hua Seng Heng Gold Futures Co., Ltd., assessed 2026 overall as still on an uptrend, but with very high volatility because prices are at elevated levels (the original target range was $4,770 - $5,200 per ounce). He recommends a "Buy on Dip" strategy, or waiting to buy when prices pull back to key support.