Gold futures to see cautious trading
KUALA LUMPUR: The gold futures contract on Bursa Malaysia Derivatives is likely to trade in cautious mode as focus has shifted back to the US data calendar with the release of several upcoming data.
SPI Asset Management managing director Stephen Innes said looking ahead, the US economic data will likely be the primary driver of gold demand in the absence of geopolitical risks.
“Therefore, we can anticipate gold trading within a wide and potentially volatile range, with levels expected to fluctuate between US$2,275 and US$2,245 per troy ounce, subject to the outcomes of US economic data releases,” he told Bernama.
According to Innes, the gold price have declined recently, primarily due to the ease in geopolitical tensions following progress in Middle East peace talks.
“Additionally, there has been a softening in demand from Asia as local currencies strengthened amidst positive risk sentiment driven by improvements in the economic landscape, particularly in China.
“Interestingly, a less hawkish stance from the Federal Open Market Committee (FOMC) has strengthened Asian foreign exchange, including the local currency, alleviating concerns of a currency crisis,” he said.
During the holiday-shortened week, the volume of gold futures in the local market eased to 51 lots from 68 lots in the previous week, while open interest rose to 22 contracts from 17 contracts a week ago.
On a Friday-to-Friday basis, the May 2024 contract slipped to US$2,311.0 per troy ounce from US$2,367.50.
Contracts for June 2024, July 2024, August 2024, and October 2024 all settled lower at US$2,322.6 per troy ounce compared to US$2,410.70 a week earlier.
According to the London Bullion Market Association’s afternoon fix on May 2, the price of physical gold stood at US$2,288.5 per troy ounce.