Analysts anticipate profit-taking in the gold futures contract on Bursa Malaysia Derivatives in the upcoming week, projecting prices to fluctuate between US$2,360 and US$2,400 per troy ounce. With the US dollar’s recent decline, gold is increasingly perceived as insurance rather than speculation, driving its market dynamics.
Stephen Innes, Managing Director of SPI Asset Management, remarked on Friday, “We are witnessing this shift in the market now, with gold prices rising only US$60 in the past 24 hours. While no asset moves upward in a straight line, I anticipate some profit-taking early next week.” He noted that the weakening US dollar, spurred by softer economic data, is likely to boost demand for gold. “This could mark the beginning of a more significant trend, especially if the deteriorating US economic outlook gains momentum. Looking ahead to next week, I foresee gold prices ranging between US$2,360 and US$2,400 per troy ounce,” he added.
Throughout the trading week, domestic gold futures mostly traded higher, tracking the COMEX gold futures and reacting to weaker-than-expected United States nonfarm payrolls data released recently. The volume of gold futures in the local market increased to 72 lots from 51 lots in the previous week, while open interest surged to 106 contracts from 22 contracts a week earlier.
On a Friday-to-Friday basis, the May 2024 contract rose to US$2,380.80 per troy ounce from US$2,311.0 per troy ounce. Contracts for June 2024, July 2024, August 2024, and October 2024 all settled higher at US$2,390.80 per troy ounce compared to US$2,322.6 per troy ounce a week earlier.
According to the London Bullion Market Association’s afternoon fix on May 9, the price of physical gold stood at US$2,325.70 per troy ounce.
