A worker displays a one kilogram gold bullion bar at the ABC Refinery in Sydney on August 5, 2020. (Photo by DAVID GRAY/ AFP)
KUALA LUMPUR: The gold futures contract on Bursa Malaysia Derivatives is expected to trade higher this week, as investors are still drawn to the safe-haven asset following the US Federal Reserve’s (Fed) decision to cut interest rates for the third time this year.
The US Federal Open Market Committee cut the target range for the federal funds interest rate by 25 basis points to between 3.5% and 3.75%, the third reduction this year from between 4.25% and4.50% in December last year – a decision that also weighed on the US dollar.
The move marks the Fed’s third consecutive rate cut since September this year, and the sixth since September 2024.
The cut came amid a deteriorating US labour market and weakening demand, which prompted the Fed to act.
Bank Muamalat Malaysia Bhd’s chief economist, Mohd Afzanizam Abdul Rashid, told Bernama that gold is likely to hold around US$4,300 per troy ounce level next week.
He said a series of key US data releases this week will also provide fresh guidance for market participants.
The data releases include US non-farm payrolls, consumer price index, personal consumption expenditures, as well as the University of Michigan consumer sentiment index.
Week-on-week, the spot-month December contract edged higher to US$4,324.50 per troy ounce from US$4,206.10 per troy ounce.
The January 2026 contract strengthened to US$4,341.40 per troy ounce from US$4,221.80 per troy ounce, while February 2026 edged lower to US$4,357.20 per troy ounce from US$4,269.90 a week earlier.
Meanwhile, April 2026 and June 2026 contracts both settled higher at US$4,394.20 per troy ounce from US$4,303.80 per troy ounce previously.
Weekly trading volume tumbled to 192 lots from 299 lots last week, while open interest increased to 238 contracts from 148 contracts a week ago.
Physical gold was priced at US$4,230.35 per troy ounce, according to the London Bullion Market Association afternoon fix on Dec 11. — Bernama
