Gold set to trade cautiously next week amid rising US yields, Middle East tensions

KUALA LUMPUR: Gold futures on Bursa Malaysia Derivatives are expected to trade cautiously next week as United States Treasury yields continue to rise significantly amid ongoing tensions in the Middle East.

A dealer said gold remained compressed but resilient, caught in a tug-of-war between rising Treasury yields and ongoing Middle East uncertainties.

Yields on US Treasury advanced last Tuesday as investors continued to dump bonds on fears inflation is reigniting, which saw the 30-year Treasury yield hit the highest level in nearly 19 years.

Kenanga Investment Bank Bhd forecasts that escalating US-Iran tensions and persistent inflation concerns are putting pressure on global bond markets.

Gold and US Treasury bonds are both major safe-haven assets, but they have a distinct inverse relationship whereby when US Treasury bond yields rise, the opportunity cost of holding non-yielding gold increases, putting downward pressure on gold prices.

On a week-on-week basis, the spot-month May 2026 contract decreased to US$4,531.60 per troy ounce from US$4,569.90 per troy ounce last Friday, June 2026 fell to U$4,548.60 per troy ounce from US$4,586.90 per troy ounce.

The July, August and October 2026 contracts all settled lower at US$4,562.80 per troy ounce from US$4,600.90 per troy ounce in the preceding week.

Weekly trading volume enhanced to 120 lots from 75 lots, while open interest trimmed to 89 contracts from 94 contracts a week earlier.

Physical gold was fixed at US$4,505.25 per troy ounce at the London Bullion Market Association’s afternoon fix on May 21, 2026.

© New Straits Times Press (M) Bhd

المصدر: New Straits Times