GOLD: Firms On Risk Aversion, Correlation With USD Eyed

• MNI BOJ: 8 OUT OF 9 JAPAN REGIONS KEEP ECON VIEW FROM JULY
• MNI BOJ: 1 OUT OF 9 JAPAN REGIONS CUT ECON VIEW FROM JULY

• RES 4: 129.50 High Aug 5  
• RES 3: 129.44 High Sep 10 and key short-term resistance     
• RES 2: 129.13 High Sep 17 
• RES 1: 128.84 61.8% retracement of the Sep 10 - 25 bear leg    
• PRICE: 128.44 @ 05:42 BST Oct 6
• SUP 1: 128.24/127.88 Low Oct 1 / Low Sep 25       
• SUP 2: 127.61 Low Sep 3 and the bear trigger
• SUP 3: 127.46 1.00 proj of the Aug 14 - 15 - 28 price swing  
• SUP 4: 127.13 1.236 proj of the Aug 14 - 15 - 28 price swing  

Bund futures are holding on to the bulk of their latest gains. The recent climb appears corrective. Key support and the bear trigger lies at 127.61, the Sep 3 low. Clearance of this level would confirm a continuation of the medium-term bear cycle. For bulls, a clear reversal higher would refocus attention on key resistance at 129.44, the Sep 10 high. First resistance is 128.84, 61.8% of the Sep 10 - 25 bear leg.

September Thai inflation was lower than expected with headline printing at -0.7% y/y after -0.8% and core at +0.65% y/y following August’s +0.8%. The Bank of Thailand decision is announced Wednesday, the first with new pro-growth Governor Vitai, and it is widely forecast to cut rates 25bp to 1.25%. The soft September CPI print along with lacklustre growth reinforces those expectations. 

• Core inflation was its lowest in just over a year despite 100bp of easing begun in October 2024 as domestic growth remains weak. Government energy subsidies and lower food prices from good harvests pushed headline into negative territory where it has been for six straight months.
• Consumer data have generally been soft with August with consumer confidence falling to its lowest since December 2022, July private consumption down 0.3% y/y and August tourist arrivals contracting 12.8% y/y. Q2 real consumption growth slowed to 2.1% y/y from 2.5%. Recent political instability has been unhelpful but the new government is looking at ways to support households although it has also promised new elections.
• There was downward pressure on core inflation from clothing, housing, and personal & medical care.

Thailand CPI y/y%

Source: MNI - Market News/LSEG