Gold futures to stay muted next week

KUALA LUMPUR (BERNAMA) – Gold futures contract on Bursa Malaysia Derivatives will likely experience muted trading next week as traders weigh mixed sentiments arising from external developments.

Phillip Futures Sdn Bhd dealer Ong Su Ling said while gold prices would remain supported by the ongoing United States (US)-China tensions and uncertainties surrounding global economic growth, there is also a possibility for gold prices to trade lower due to a technical correction as market players await more clues from US economic data, as well as corporate earnings.

“Furthermore, lack of liquidity (trading volume) due to fewer players in the Bursa Malaysia gold futures market may also cause the local market to end with no volume, as well as the possibility that many investors are more focussed on US dollar gold,” Ong told Bernama.

Fresh off achieving its all-time high of USD1,980-level this week, OANDA Asia-Pacific Senior Market Analyst Jeffrey Halley said the underlying bullish case for gold remained intact, given the liquidity-ready Federal Reserve, negative real yields across the US yield curve and a lower US dollar.

He said the precious metal now has a resistance to overcome and test the USD2,000 an ounce region, after it traced out a double top at USD1,981 an ounce, which would provide stern resistance to short-term rallies.

“Given the volatility of the past two days, initial support is now somewhat distant at USD1,941 an ounce,” he added.

During the week just ended, the local gold futures were unchanged for most of the week, except on Thursday.

On a Thursday-to-Friday basis, July 2020 gained 418 ticks to MYR266.30 a gramme, while August 2020, September 2020 and October 2020 all added 165 ticks to MYR256, MYR254.45 and MYR254.35 a gramme.

A shopkeeper at a jewellery shop. PHOTO: AP