Gold price uptrend likely to continue next week

August 4, 2019

KUALA LUMPUR-Malaysia (Aug 4) - Gold futures contract on Bursa Malaysia Derivatives is likely to continue its uptrend next week amid the trade war fears and lower US Federal Reserve (Fed) interest rate.

 Phillip Futures Sdn Bhd dealer Tan Kien Kiong said the market was in the "risk-on" mode, particularly after US President Donald Trump threatened to impose another 10 per cent tariff on the remaining US$300 billion worth of China imports.

 "The lower Fed interest rate, which was reduced by 25 basis-point to a range of 2.00 per cent to 2.25 per cent last Thursday, could also support the gold price further," he told Bernama.

 Meanwhile, another dealer said the ringgit, which anticipated to trend lower against the greenback next week, could also spur demand for the local gold futures as it would make the precious metal cheaper for non-ringgit holders.

 For the holiday-shortened week, Bursa Malaysia gold futures were traded mostly higher, as risk appetite improved amid trade war fears, the less dovish (as compared with markets' 50 basis-point expectations) Fed interest rate cut early Thursday, as well as ringgit's movement.

 The market was closed Tuesday in conjunction with the installation of Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah as the country’s 16th Yang di-Pertuan Agong.

 On a Friday-to-Friday basis, new spot month August 2019 rose 58 ticks to RM190.60 per gramme, September 2019 advanced 50 ticks to RM190.60 per gramme and October 2019 jumped 64 ticks to RM191.60 per gramme.

 New delivery month November 2019 stood at RM192.05 per gramme.

 Weekly turnover was higher, registering 37 lots worth RM701,650 versus seven lots worth RM131,760 in the previous week, while open interest widened to 112 contracts from 96 contracts previously.


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