KUALA LUMPUR, Oct 12 — The gold futures contract on Bursa Malaysia Derivatives is projected to exhibit a less bullish sentiment in the upcoming week. However, the market will still find some support from ongoing geopolitical tensions, according to analysts.
Market Sentiment and Influencing Factors
US Dollar Resilience: The resilience of the US dollar has dampened enthusiasm for gold, typically considered a safe-haven asset. A stronger dollar often makes gold more expensive for holders of other currencies, thereby reducing demand.
Federal Reserve Outlook: A less dovish stance from the US Federal Reserve regarding interest rates is contributing to this subdued outlook. If the Fed continues its current monetary policy, it could further limit the appeal of gold.
Recent Performance
On a Friday-to-Friday basis, the spot month October 2024 contract closed the week at US$2,645.90 per troy ounce, down from US$2,669.80 the previous week. The November 2024 contract also fell to US$2,667.70 from US$2,691.10. The December 2024, January 2025, and February 2025 contracts similarly settled lower, with December 2024 at US$2,669.10 compared to US$2,691.60.
Trading Activity
Volume: Trading volume increased to 88 lots from 71 lots in the previous week.
Open Interest: Open interest narrowed to 53 contracts, down from 67 contracts.
Current Gold Prices
According to the London Bullion Market Association’s afternoon fix on October 10, the price of physical gold stood at US$2,628.95 per troy ounce.
Conclusion
While geopolitical tensions may provide some downside support for gold prices, the overall outlook appears limited due to the strength of the US dollar and the Fed’s interest rate policies. Traders will be closely monitoring economic data from the US that could influence future Fed decisions and subsequently impact gold prices.
