KUALA LUMPUR, Sept 14 — The gold futures contract on Bursa Malaysia Derivatives (BMD) is expected to trade in a consolidation mode next week, as investors await the outcome of the United States Federal Open Market Committee (FOMC) meeting scheduled for September 17-18.
Market Insights:
Stephen Innes, Managing Director of SPI Asset Management, highlighted that gold prices surged on Friday, driven by anticipation of a potentially larger-than-expected rate cut by the US Federal Reserve. Market expectations have priced in an aggressive easing cycle, raising the question of whether the cut will be 50 basis points (bps) or a smaller 25 bps.
Innes noted, “The real question is not whether the cut will happen, but whether it will be 50 bps. Even if the cut is only 25 bps, falling short of dovish expectations, gold should remain supported on dips.” He added that the market would likely shift its focus to the strong possibility of a 50 bps cut in November.
Price Projections:
Innes projected that if the Fed delivers a 50 bps cut, gold could trade between USD 2,550 and USD 2,600. Any pullbacks in gold prices are likely to be viewed as buying opportunities, given the solid bullish trend.
Weekly Performance:
Spot Month September 2024: Increased to USD 2,575.00 per troy ounce from USD 2,539.00 the previous week.
October 2024, November 2024, December 2024, February 2025, and April 2025: All settled higher at USD 2,587.30 per troy ounce, up from USD 2,539.00 the previous week.
Trading Activity:
Volume: Improved to 85 lots from 56 lots the prior week.
Open Interest: Expanded to 74 contracts from 49 contracts previously.
The price of physical gold was reported at USD 2,545.95 per troy ounce, according to the London Bullion Market Association’s afternoon fix on September 12.
Public Holiday Notice:
Bursa Malaysia Bhd and its subsidiaries will be closed on Monday, September 16, 2024, in observance of Prophet Muhammad’s birthday and Malaysia Day public holiday. Trading and settlement activities will resume the following day.
As the market awaits the Fed’s decision, gold futures are likely to experience consolidation, with potential for significant movement depending on the outcome of the FOMC meeting.
