Gold Futures Forecasted to Trade Narrowly Next Week Amid Interest Rate Hopes

The gold futures market on Bursa Malaysia Derivatives is expected to trade within a narrow range next week, according to Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalalat Malaysia Bhd. The rising interest rate environment could lend support to the US dollar, weighing on demand for gold.

Aside from interest rates, there are structural concerns in the bond market, said Dr Mohd Afzanizam. Rising long-term yields amid elevated government debt levels could increase demand for gold as a safe-haven asset in the medium to long term.

The US Federal Reserve's (Fed) interest rate decision and latest economic projections will likely attract market attention next week. Spot gold prices are expected to hover between $4,300 and $4,350 per troy ounce, as expectations of a rate hike limit the upside potential for gold prices.