KUALA LUMPUR: The gold futures contract on Bursa Malaysia Derivatives is expected to see cautious trading next week, tracking the external developments as well as the US COMEX performance, an analyst said.
SPI Asset Management managing director Stephen Innes expects gold to trade at the US$2,000 per troy ounce level (US$1=RM4.77).
"The US Federal Reserve speakers have been cautious regarding the inflation outlook, which might negatively affect gold prices.
"Additionally, the upcoming US economic data releases, particularly the Personal Consumption Expenditures (PCE) report, could influence market sentiment and push rate cut expectations further away, potentially impacting gold prices negatively," he told Bernama.
Furthermore, Innes said that the ongoing Middle East peace talks could contribute to a lower demand for gold as investors may perceive reduced geopolitical risks.
"But without solid exchange-traded fund demand, we also think gold will struggle to move above US$2,050 per troy ounce over the near to medium term.
"The US economy is surprisingly resilient and supports the US dollar, which is also negative for gold," he added.
For the week just ended, the gold futures traded mostly higher, tracking the positive US COMEX gold futures' performance.
The gold futures volume in the local market eased to 89 lots from 120 lots traded in the previous week, while open interest decreased to 71 contracts from 133 contracts a week ago.
On a Friday-to-Friday basis, March 2024 increased to US$2,027.10 per troy ounce compared to US$2,017.10 per troy ounce, and April 2024 rose to US$2,038.10 per troy ounce against US$2,028.40 per troy ounce previously.
Contracts for both May 2024 and June 2024 settled higher at US$2,038.10 per troy ounce against US$2,028.40 per troy ounce a week earlier.
The new spot month August 2024 contract stood at US$2,038.10 per troy ounce.
The price of physical gold stood at US$2,024.00 per troy ounce, according to the London Bullion Market Association's afternoon fix on Feb 22. --BERNAMA
