KUALA LUMPUR, June 8 — Bursa Malaysia Derivatives (BMD) Bhd expects the volume in gold futures contracts traded on the local bourse to double from the current 312,668 contracts within the next 20 months.

Chief executive officer Chong Kim Seng said the target would be driven by programmes organised by BMD to educate the public in trading in gold futures contracts.

He however said the volume would be influenced by the gold price, which is currently trading at US$1,170 per ounce (28.349 gramme).

He said that external factors such as US economic data and the Federal Reserve’s interest rate hike might not have an impact on local market activity as the investors’ demand for the commodity would recover.

“The market is already volatile and is currently in the process of finding back its level (price),” he said, adding that the demand for gold jewellery in Malaysia stands at about RM1.4 billion annually.

The gold futures price reached its highest in 2012, when it was traded at US$1,970 per ounce, and recorded its lowest value in 10 years when it was traded at US$400 per ounce in 2009.

Chong said this at a media briefing on Gold Precious Metals Price Outlook Conference and Financial Markets Price Outlook Conference, which will be held next week.

Meanwhile, the Federation of Goldsmiths and Jewellers Association of Malaysia President Ermin Siow Der Ming said the depreciated ringgit had also impacted the commodity price, which is traded in US dollars.

“Therefore, local buyers are unable to enjoy the lower physical gold price,” he added.

On post-Goods and Services Tax impact, Siow said the retail segment sales had dropped between 20 per cent and 50 per cent as consumers were cautious on their spending.

“We hope with the upcoming Ramadan, Hari Raya, and followed by other festive celebrations later in the year including Christmas in December, the buying sentiment would recover,” he added. — Bernama