By Sharifah Pirdaus Syed Ali

KUALA LUMPUR, Feb 10 (Bernama) -- Gold futures are expected to trade range-bound with upside bias next week, tracking the performance on the US COMEX, an analyst said.

SPI Asset Management managing director Stephen Innes said gold should remain supported by the prospect of Federal Reserve (Fed) interest rate cuts, heightened geopolitical risk and China’s Lunar New Year holiday demand for physical gold.

He noted that to sustain the current momentum in gold prices, a further decline in United States (US) Treasury yields or a resurgence of investment demand, particularly in the form of persistent exchange-traded fund (ETF) buying, would be necessary.

“However, it is important to highlight the market is now better aligning its rate-cut bets closer to the Fed. This suggests that gold prices could have trouble cresting the latest highs unless the risk of a US recession increases and war in the Middle East notwithstanding.

“Hence, I am looking for more range trading, but the US consumer price index (CPI) release on Tuesday should be considered a high risk even for gold. If inflation runs hot it could further delay Fed cuts and weigh on gold,” he told Bernama.

Innes anticipated that gold would likely trade in the range of US$2,015 to US$2,065 per ounce.

For the week just ended, the gold futures volume in the local market fell to 85 lots from 119 lots traded in the previous week. 

Open interest eased to 84 contracts from 87 contracts a week ago. 

On a Friday-to-Friday basis, spot month February 2024 fell to US$2,039.80 per troy ounce from US$2,064.20  in the previous week, while March 2024 decreased to US$2,049.70 per troy ounce compared to US$2,074.10 previously.

Contracts for April 2024, May 2024 and June 2024 all settled lower at US$2,057.70 per troy ounce against US$2,082.50 a week earlier.

The price of physical gold stood at US$2,028.65 per troy ounce, according to the London Bullion Market Association’s afternoon fix on Feb 8.

-- BERNAMA