Gold's Longer-Term Outlook Remains Positive Amid Near-Term Headwinds

Strategic Insights -

Gold's price has touched a three-week high, supported by demand for the safe-haven bullion after US President Donald Trump threatened to impose a 30 per cent tariff on imports from the European Union and Mexico. The Tradeplus Shariah Gold Tracker ETF on Bursa Malaysia climbed 0.92 per cent to RM4.41 per unit, bringing its gains to 21 per cent so far this year. Analysts remain optimistic about gold's longer-term outlook, citing core demand from Asia and emerging market central banks as a key driver of the market.

Key Takeaways:

  • Gold prices have touched a three-week high at US$3,354.83 per ounce, with US gold futures adding 0.2 per cent to US$3,371.
  • The Tradeplus Shariah Gold Tracker ETF on Bursa Malaysia has climbed 0.92 per cent to RM4.41 per unit, bringing its gains to 21 per cent so far this year.
  • Core demand from Asia and emerging market central banks remains resilient, providing the market with durability beyond headline-driven flows.
  • Analyst Stephen Innes expects gold's longer-term trajectory to remain supported, citing chronic fiscal deficits and ongoing shifts in global power dynamics.
  • Gold's performance for the rest of the year will largely depend on US inflation data and how it shapes expectations for Federal Reserve (Fed) rate cuts.
  • Solid demand from Asia, especially China and India, along with steady buying by emerging market central banks, continues to support prices, providing a firm floor for the market.
  • Lighter exchange traded fund (ETF) flows and reduced managed money positions point to cooling near-term enthusiasm, but Innes notes that ETF participants are often "tourist" gold holders who are reactive, short-term traders rather than buy-and-hold core gold bugs.

Statistics:

  • Spot gold was steady at US$3,354.83 per ounce at 12.10pm Malaysian time yesterday.
  • US gold futures added 0.2 per cent to US$3,371, with prices up a hefty 27.7 per cent for the year.
  • The Tradeplus Shariah Gold Tracker ETF on Bursa Malaysia climbed 0.92 per cent to RM4.41 per unit, bringing its gains to 21 per cent so far this year.
  • Gold has outperformed the US dollar, rallying to a three-week high despite near-term headwinds.

Sources:

  • "KUALA LUMPUR: GOLD'S longer-term outlook remains positive despite near-term headwinds stemming from shifts in investor capital and evolving expectations regarding United States monetary policy, said an analyst." (No date)
  • "US President Donald Trump threatened to impose a 30 per cent tariff on imports from the European Union and Mexico." (No date)
  • "The Tradeplus Shariah Gold Tracker ETF on Bursa Malaysia climbed 0.92 per cent to RM4.41 per unit, bringing its gains to 21 per cent so far this year." (No date)
  • "SPI Asset Management managing partner Stephen Innes said core demand from Asia and emerging market central banks remains resilient, providing the market with durability beyond headline-driven flows." (No date)
  • "US gold futures added 0.2 per cent to US$3,371, with prices up a hefty 27.7 per cent for the year." (No date)