Thai Baht devaluation combined with interest rate cut expectations leads to warming, Thai gold price sets a new high for the year. Silver surges due to AI heat dissipation demand, outperforming precious metals.

On August 4, 2026, the precious metals market experienced multiple positive developments. Gold prices in Thailand and global silver prices rose in tandem, with Thai gold prices hitting a new high for the year driven by exchange rates and macroeconomic expectations. Silver prices led the way due to the surge in industrial demand driven by the AI industry, resulting in a strong trend for the precious metals sector overall. ## Macro Backdrop: Dual Drivers of Rate Cut Expectations and Exchange Rate Volatility Last week, the US Federal Reserve released the minutes of its July monetary policy meeting, signaling a hawkish pivot toward easing in September. Market expectations for a decrease in the Federal Funds Rate by 75-100 basis points within the year are rising, as a decrease in nominal interest rates directly lowers the opportunity cost of holding gold, pushing international gold prices to the $2550 threshold. Simultaneously, the Bank of Thailand maintained its accommodative monetary policy stance, and the Thai baht's exchange rate against the dollar weakened for three consecutive trading days, breaking below the 37 Baht per dollar level in the early trading on August 4, setting a new low since 2025 and directly pushing up gold prices priced in Thai Baht. ## Thai Gold Market: Jewelry and Bar Price Reach Year-End Highs As of August 4 in the local trading session in Thailand, the Thai Gem Association announced domestic gold jewelry purchase prices of 1,285 Baht per gram and selling prices of 1,305 Baht, representing a 3.2% increase from the end of July. The purchase price for gold bars was 1,255 Baht per gram, setting a new high since 2026. Analysts point out that the rise in local Thai gold prices exceeded international gold prices, mainly due to the exchange rate effect of the baht depreciation, combined with the increased demand for gold as a safe-haven asset among Thai investors, with cumulative gold investment demand in the first half of the year growing by 27% year-on-year. Key drivers for the rise in Thai gold prices include: * Expectations of a Fed rate cut driving up international gold prices, amplified by exchange rate conversion. * Increased safe-haven demand from local Thai investors, with the gold ETF (ticker GOLD) recording a record net inflow over the last three months. * The peak season for gold jewelry consumption, with stocking demand before the Qixi Festival and Songkran supporting spot prices. ## Silver Market: AI Cooling Demand Sparks Industrial Surge, Outperforming Gold Compared to gold's safe-haven driver, the rise in silver prices comes from the surge in industrial demand. The construction speed of AI data centers has exceeded expectations since 2026, and the demand for heat dissipation materials for high-power chips has led to a 120% year-on-year increase in orders for silver-based heat dissipation materials. The global silver industrial demand ratio has reached a historic high of 62%. On August 4, international silver prices broke the $47 per ounce threshold, rising 2.3% intra-day, higher than gold's 1.1% intra-day increase. The gold-silver ratio fell near 75, the lowest level since October 2025. Local Thai silver prices also rose in tandem, and the Thai silver futures contract rose 1.9% intra-day, while Thai silver jewelry prices increased by 4.1% from the end of July. The Thai Silver Association stated that spot orders for industrial silver increased by 18% year-on-year, and demand for jewelry silver also saw growth due to the higher gold price, as investor interest in silver has clearly increased. ## Outlook: Gold Bull Market Pattern Expected to Continue Several analysts indicate that the driving logic for the precious metals market is clear: Gold is supported by dual factors of rate cut expectations and safe-haven demand, and the long-term upward trend remains unchanged. Silver benefits from the surge in industrial demand from industries like AI and new energy, with persistent supply and demand shortages, suggesting its gains may surpass those of gold. For Thai investors, they need to monitor the risk of baht exchange rate volatility; if the baht stops falling and reverses, it could suppress domestic gold price increases, but in the long term, gold's value as a safe-haven asset remains prominent. Investors should monitor the following market trends: * The magnitude of the September Fed rate decision and subsequent inflation data. * Whether the Bank of Thailand will intervene in the exchange market to stabilize the baht exchange rate and its impact on domestic gold prices. * The sustainability of industrial demand for silver from AI data center construction, and changes in global silver mine output.