Gold Futures To Trade In Consolidation Mode Next Week

By Siti Noor Afera Abu

KUALA LUMPUR, Sept 28 (Bernama) -- The gold futures contract on Bursa Malaysia Derivatives is likely to trade in consolidation mode next week ahead of the release of United States (US) economic data next week, said an analyst. 

SPI Asset Management managing director Stephen Innes said the market narrative is still leaning bullish gold on the weaker US dollar, driven by the US Federal Reserve’s ongoing rate cut cycle.

“However, I see the momentum slowing a bit as US economic data continues to hold up, suggesting the market may be pricing in too many cuts.

“This overestimation is probably mirrored in gold prices, where the market seems to be riding the negative dollar sentiment,” he told Bernama.

Additionally, with weekly jobless claims not ticking higher, Innes expects some bullish bets on gold to scale back ahead of next week’s NFP data.

Regionally, China’s August net gold imports via Hong Kong were the lowest in over two years, suggesting local sellers anticipate muted demand. 

Innes said this could be tied to the Chinese government’s full-court press on stimulus, strengthening the local currency.

“As a result, there’s less need for retail investors to hedge against a weaker currency by buying gold,” he added.

On a Friday-to-Friday basis, spot month September 2024 rose to US$2,661.60 per troy ounce from US$2,614.20 per troy ounce last week.

Meanwhile, October 2024, November 2024, December 2024, February 2025 and April 2025 all settled higher at US$2,675.10 from US$2,627.00 per troy ounce previously.

Volume increased to 117 lots from 82 last week, while open interest widened to 71 contracts from 44 previously.

The price of physical gold stood at US$2,663.75 per troy ounce, according to the London Bullion Market Association’s afternoon fix on Sept 26.

-- BERNAMA