Oil Price Uncertainty Weighs on Gold Futures Next Week

The gold futures market on Bursa Malaysia Derivatives is expected to trade lower next week, according to Stephen Innes, managing partner of SPI Asset Management. He noted that gold remains inversely correlated with oil prices in the current environment.

If oil prices move higher, gold is likely to come under pressure, while a retreat in crude should provide support for the precious metal, Innes said. There appears to be structural support around the US$4,000 per troy ounce level, he added.

Inness also mentioned that China's central bank was still buying gold in May, and official-sector demand remains one of the market's primary sources of support. For next week, he expects gold to trade within a US$4,010 to US$4,110 per troy ounce range.