Gold futures contracts on Bursa Malaysia Derivatives are expected to trade with downside bias next week, tracking the performance of the United States (US) Comex gold futures.
The traders are awaiting the US Federal Reserve’s (Fed) decision on the interest rate on July 25 and 26 for clues on the market direction, dealers said.
SPI Asset Management managing director Stephen Innes said that with the US Treasury yields expected to continue to fall as inflation ebbs and the Fed widely expected to hike interest rates by another 25 basis points next week, gold could remain supported at US$1,950 per troy ounce.
“Hence we expect gold futures to move between US$1,950 to US$1,975 per troy ounce next week,” he said.
For the week just ended, Comex gold has shown its resiliency as a safe haven asset with a third consecutive weekly gain mainly supported by the anticipation that the Fed would implement its final rate increase in the current tightening cycle.
Lower interest rates made holding zero-yielding bullion more attractive for investors. Back home, Bursa Malaysia gold futures traded higher compared to the previous week.
On a weekly basis, the spot month of July 2023 rose to US$1,965.30 per troy ounce from US$1,960.50 per troy ounce, while August 2023 climbed to US$1,973.30 per troy ounce from US$1,968.30 per troy ounce previously.
Contracts for September 2023, October 2023, December 2023, and February 2023 settled at US$1,984.40 per troy ounce from US$1,979.40 per troy ounce last week.
However, the volume traded was lower, with 75 lots recorded during the week compared with 93 lots in the previous week, while open interest ended at 100 contracts.
The price of physical gold stood at US$1,976.10 per troy ounce as published by the London Bullion Market Association’s afternoon fix on July 20.
