Is the gold market truly abnormal? Gold prices have been swinging wildly both globally and in Thailand, in physical and futures markets, suggesting potential issues in price mechanisms.
Authorities have swiftly implemented measures almost simultaneously. The Gold Traders Association doubled the bid-ask spread from 100 to 200 baht, while TFEX adjusted the Daily Price Limit to fix “price distortions.” What challenges are retail investors facing amid this?
On the evening of 2 Feb 2026, the Gold Traders Association held an emergency meeting to monitor gold price developments and consider risk management strategies after observing over 69 price fluctuations in a single day.
Each movement ranged between 200-300 baht per baht-weight of gold, compared to the usual 50 baht moves. Such volatility significantly complicates price trend assessment and stock management for traders.
Sirilak Pakotiprapa, Director of Analysis at Hua Seng Heng Gold Futures Co., Ltd. shared her views with Thairath Money. She said the domestic gold market is indeed highly volatile. The Gold Traders Association increased the bid-offer spread from 100 to 200 baht to align with the wider spreads seen in global markets.
This adjustment simplifies price setting in Thailand, allowing gold retailers to better manage risk and set prices more flexibly amid sharp price swings. If conditions normalize, the spread might return to 100 baht.
Regarding the recent sharp gold sell-offs that have driven prices down, Sirilak suggested it might be due to automated trading systems (Robot Trade) using algorithms to trigger simultaneous sell orders when global gold breaks key support levels. She expects this volatility to continue for one to two more days, or at latest until the end of the week, before prices stabilize.
However, the fundamental factors for gold remain unchanged. She believes the market has overreacted to concerns about the new U.S. Federal Reserve chair's interest rate policies. Currently, a downward trend in rates is still possible under U.S. government economic policies.
If Kevin Warsh clarifies monetary policy soon, market worries should ease. Investors can wait for price stability to enter positions, as the saying goes, “Keep Calm and Buy Gold.”
The Thailand Futures Exchange (TFEX) announced changes to the Daily Price Limit for gold and silver futures contracts due to extreme volatility in global gold and silver prices—the underlying assets for Gold Futures (10/50 baht gold), Gold Online Futures, and Silver Online Futures. The existing daily price limits were insufficient, causing trading prices to not reflect actual market conditions.
TFEX stated that if prices hit the Daily Price Limit of ±20%, they may widen it to ±30%, and if volatility persists and hits the new limit, they could temporarily expand it to ±100% during the trading day to align with global market conditions.
On 2 Feb 2026, Silver Online Futures prices dropped to the -20% limit, prompting TFEX to widen the Daily Price Limit to ±30% from 14:00 onwards. The limit will revert to normal after the daily settlement price announcement before evening trading.
Regarding this case, Sirilak commented that these adjustments are necessary to ensure price mechanisms function properly. If price ceilings are too narrow amid high global volatility, TFEX prices will not reflect true market values.
The main reason for adjusting is that TFEX's products are commodity-based, and prices should track global markets. If global prices fluctuate sharply but Thai market prices hit limits, price distortions occur.
“Though prices may not actually swing as much as 30% or 100%, preparing these limits in advance is prudent for unforeseen future events,” Sirilak added.
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