Gold Futures Poised to Extend Gains as Spot Prices Hit Four-Year High

Gold futures on Bursa Malaysia Derivatives are expected to extend their gains this week, according to Bank Muamalat Malaysia's chief economist Mohd Afzanizam Abdul Rashid. He points out that spot gold prices have been strong last week, rising to US$4,305.69 per troy ounce in tandem with the decline in crude oil prices following reports of the possible reopening of the Strait of Hormuz.

The World Gold Council reported a total of US$3 billion net inflows in the gold market during July, reversing two consecutive months of outflows. This boost in demand is expected to support gold futures this week.

However, Mohd Afzanizam notes that uncertainties in the US interest rate direction could put a cap on gold prices. Meanwhile, Quintex Intel global strategist Stephen Innes points out that gold briefly came under pressure last Thursday night as a rebound in oil prices revived inflation concerns, but it recovered swiftly.