Gold futures on Bursa Malaysia Derivatives closed lower on Thursday, affected by weak demand and shifting market dynamics.
Bond Yields and Trade Policy Impact Gold Prices
SPI Asset Management managing partner Stephen Innes explained that gold is caught in a battle between opposing market forces. Recently, the balance has shifted against bullish investors who expect prices to rise.
“The sharp rise in global bond yields, mainly due to Germany’s trillion-euro stimulus, has reduced gold’s attractiveness. Yield-sensitive investors are finding it harder to hold onto gold,” Innes said.
He added that former U.S. President Donald Trump’s decision to roll back tariffs on Canada and Mexico has eased risk concerns, which previously supported gold prices.
“When demand for safe-haven assets weakens and real yields increase, gold struggles. That is exactly what we are seeing today,” he noted.
Gold Futures Contracts Record Losses
The March 2025 contract fell to US$2,906.40 per troy ounce, down from US$2,925.30 on Wednesday. Meanwhile, the April 2025 contract slipped to US$2,916.20 per troy ounce, compared to US$2,935.50 previously.
Other contracts also recorded declines:
May 2025: US$2,924.60 per troy ounce (down from US$2,946.10)
June 2025: US$2,924.60 per troy ounce (down from US$2,946.10)
August 2025: US$2,924.60 per troy ounce (down from US$2,946.10)
Trading Volume and Open Interest Decline
Trading volume dropped to 154 lots, down from 176 lots in the previous session. Open interest also declined, easing to 188 contracts from 209 contracts.
Physical Gold Prices
According to the London Bullion Market Association’s afternoon fix on March 5, physical gold was priced at US$2,913.25 per troy ounce.
Conclusion
Gold prices continue to face pressure due to rising bond yields and easing trade tensions. Investors remain cautious as shifting market conditions influence the demand for safe-haven assets.
Related topics:
