Cautious regional positioning across gold, the peso and equities
Expectations for Malaysian gold futures, the Philippine peso and Manila equities show investors weighing different supports across commodities, currencies and shares.
Economics & Markets··Morning
Expectations of gains in gold
The Star reports an analyst expectation that gold futures on Bursa Malaysia Derivatives will rise this week, with the week's outcome and price direction remaining open. Bank Muamalat Malaysia chief economist Mohd Afzanizam Abdul Rashid projected that spot gold, which reached 4,305.69 dollars per troy ounce, would trade between 4,250 and 4,350 dollars. World Gold Council data also showed net inflows of 3 billion dollars into gold exchange-traded funds in July, reversing 2 months of outflows. Quintex Intel global strategist Stephen Innes said gold moved back above 4,300 dollars after a brief decline, with central-bank demand and Asian retail buying supporting the recovery. The same report said news that the Strait of Hormuz could reopen had pushed crude-oil prices lower. The report links the gold expectation to fund flows, central-bank demand and regional retail buying alongside the latest price move. The stated range represents a market view attributed to a source and preserves uncertainty about the outcome.[1]
A daily loss and weekly gain for the peso
The starting point for the Philippine peso changes across two time frames. Bankers Association of the Philippines data show the currency closed at 60.90 pesos to the dollar on Friday, losing 8.5 centavos during the day. On a weekly basis, however, it strengthened by 34 centavos from 61.24 on 31 July. That distinction shows why a one-day move and a weekly direction carry different meanings. Traders speaking to BusinessWorld expect the peso to appreciate against the dollar this week after weak US payroll data. Rizal Commercial Banking Corp chief economist Michael L. Ricafort said higher crude-oil prices on Friday had also weighed on the peso. One trader expected a range of 60.50 to 61.20 pesos to the dollar this week, while Ricafort projected 60.60 to 61.10. Both ranges are expectations attributed to their sources, with the eventual exchange rate left open. BusinessWorld presents two opposing considerations that could shape the peso's place in regional positioning: weak US payrolls affect the dollar side of the picture, while oil prices create separate pressure on the Philippine currency.[2]
Caution alongside gains in equities
The Philippine Stock Exchange index rose 0.2 per cent on Friday to close at 6,290.35, a gain of 53.91 points from 6,236.44 a week earlier. F. Yap Securities said mining and oil shares led the advance as gold and copper prices strengthened. Philstocks Financial research manager Japhet Louis O. Tantiangco said the market had ended a 2-week losing run, yet he expected investors to remain cautious because of developments between the US and Iran and the latest growth data. July inflation of 6.2 per cent also supported expectations of further tightening. Stronger commodity prices may have helped commodity-linked shares while investors remained cautious. That caution could instead be explained chiefly by July inflation, the latest growth data or developments between the US and Iran. The reports on gold, the peso and equities point in different regional directions. They show investors assessing risks and supports on different scales: fund flows and demand in gold, US payrolls and oil in the peso, and commodity prices and domestic macroeconomic data in shares. The attributed views describe positioning expectations and preserve uncertainty about the price path.[3], [1], [2]
