MIDDLE EAST TENSIONS TO SUSTAIN INTEREST IN GOLD FUTURES NEXT WEEK

By Nurul Jannah Kamaruddin

KUALA LUMPUR, Oct 5 (Bernama) -- Interest in the gold futures contract on Bursa Malaysia Derivatives is likely to sustain next week amid the Middle East tensions, but the anticipation of a stronger US dollar could put downward pressure on prices.

SPI Asset Management managing director Stephen Innes said gold would continue to find support from geopolitical risks, but it is far from immune to the pressure of a stronger US dollar.

“Since gold is priced in US dollar, any uptick in the greenback could weigh on the metal, not to mention that rising interest rates increase the opportunity cost of holding non-yielding assets like gold.

“So, while investors are expected to take advantage of lower prices to purcgase gold, the upside could be capped by a firmer dollar and higher US yields,” he told Bernama.

Innes reckoned that for gold to truly break higher, the market probably needs to see a significant downside miss in Friday’s US non-farm payrolls (NFP) report.

However, the report released by the US Bureau of Labor Statistics showed NFP in the country actually rose by 254,000 in September, stronger than the 147,000 expected.

“Without that, demand for the US dollar could stay intact, especially with geopolitical risks driving oil prices higher, keeping gold’s potential gains in check,” he added.

On a Friday-to-Friday basis, new spot month October 2024 stood at US$2,669.80 per troy ounce and November 2024 ended the week firmer at US$2,691.10 per troy ounce against last week’s US$2,675.10 per troy ounce

December 2024, February 2025 and April 2025 all settled higher at US$2,691.60 from US$2,675.10 per troy ounce previously.

Volume decreased to 71 lots from 117 last week while open interest narrowed to 67 contracts from 71 previously.

According to the London Bullion Market Association’s afternoon fix on Oct 3, the price of physical gold stood at US$2,647.65 per troy ounce.

-- BERNAMA