KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaway
Gold hit a fresh record above US$3,600/oz as traders priced in a September Fed rate cut and sought protection amid stagflation concerns, governance risks at the Fed, and tariff-driven inflation threats.
Market Snapshot
Gold Futures (DEC5):
Session High: US$3,631.00 (+1.1%)
Prior Close: US$3,592.20 (record)
ICE USD Index: 98.35 (–0.05)
Treasury Yields:
2Y: 3.66% (+1.5 bps)
10Y: 4.272% (+0.9 bps)
Drivers of the Rally
Fed Policy Outlook:
Markets fully pricing a 25bps cut at Sept. 17 meeting.
Lower rates reduce gold’s opportunity cost vs interest-bearing assets.
Softer USD enhances appeal of gold to foreign investors.
Safe-Haven Demand:
Rising stagflation fears from tariffs slowing growth while raising prices.
Trump pressures Fed: attempts to fire Governor Lisa Cook, push Powell for deeper cuts.
Governance Premium:
Concerns over Fed independence adding to gold’s bid.
U.S. Treasury Secretary Scott Bessent to start process of finding next Fed chair.
Expert View
Saxo Bank (Ole Hansen):
Gold rally not only about cuts, but also governance risk premium.
Tariff-driven stagflation adds to demand.
Market Tone: Bullish narrative broadening beyond just Fed easing expectations.
Investor Watch
Gold Outlook: Momentum firmly bullish; further upside possible if Fed signals accelerated cuts.
FX Impact: Dollar weakness supports gold; watch for Fed pushback on easing.
Equities/Miners: Gold producers (AEM, AGI) benefit; broader commodities supported by safe-haven demand.
Risks:
Stronger U.S. data could slow cut expectations, triggering gold pullback.
Sharp rise in yields may cap upside momentum.
Comments
Post a Comment