KUALA LUMPUR: Gold futures contract on Bursa Malaysia Derivatives is expected to trade on a downside bias this week, between US$1,970 and US$2,000 (US$1=RM4.46), tracking the performance of gold futures on the Comex division of the New York Mercantile Exchange, an analyst said.
He said the Comex gold slipped on Friday, as the US dollar and bond yields rose following data showing the United States (US) personal consumption expenditure price rising more than estimated while initial jobless claims also unexpectedly fell in the previous week.
“Market participants are waiting for May’s Federal Open Market Committee meeting to conclude and gauge market direction.
There is still an overwhelming consensus that the Federal Reserve (Fed) will initiate its 10th consecutive rate hike.
“In fact, the US Dollar Index, which tracks the greenback against a basket of currencies, touched a fresh weekly high and exerts some downward pressure on the US dollar-denominated gold price,” he told Bernama.
SPI Asset Management managing director Stephen Innes said that outside of the on-going recession worry, gold could find support from US debt ceiling concerns.
“Beyond that, the biggest risk for gold markets is an easing of US credit concerns and stronger US economic data that could cause the Fed to hike beyond the current 25 basis points priced for May.
“Ultimately, the risk-reward for staying long for gold on US recession concerns versus an unlikely US soft landing is much higher, suggesting that gold will continue to find support on dips for the foreseeable future,” he added.
For the short week just ended, domestic gold futures traded mostly lower, except on Wednesday, with a total of 136 lots recorded throughout the week.
On a weekly basis, spot month April 2023 fell to US$1,982.70 per troy ounce from US$1,994.00 per troy ounce previously. – BERNAMA
May 2023 slipped to US$1,990.90 per troy ounce from US$2,004.10 per troy ounce previously.
Contracts for June 2023, July 2023 and August 2023 all settled lower at US$1,995.00 per troy ounce compared with US$2,004.10 per troy ounce the previous week.
The price of physical gold stood at US$1,985.65 per troy ounce as published by the London Bullion Market Association’s afternoon fix on April 27, 2023. – BERNAMA
