KUALA LUMPUR: The rubber market is expected to remain volatile this week, with a slight upward trend forecast, driven by unpredictable weather in southern Thailand, said industry expert Denis Low.
Low pointed out that the Thai Meteorological Department (TMD) has predicted a new cold wave, accompanied by strong winds, while the northeast monsoon continues to bring heavy rain to the southern region.
“The incessant rainfall in the rubber-producing regions is further hampering production and pushing prices higher.
“Hence, there could be supply shortages in the coming weeks,” he told Bernama.
Meanwhile, the Malaysian Rubber Glove Manufacturers Association (Margma) said the rubber market is likely to experience slower trading activity due to the Chinese New Year holidays.
The association stated that the market maintained its upward trend this week despite mixed signals from regional rubber futures markets.
“This upward movement is primarily supported by ongoing concerns over tight supply.
“Wet weather conditions in Thailand, along with heavy rains and potential flooding in key rubber-producing countries, could further disrupt production and tighten supply next week,” it added.
Gold futures on Bursa Malaysia Derivatives are expected to trade higher, with prices likely surpassing the US$2,800 per troy ounce level on weaker US dollar, said SPI Asset Management managing partner Stephen Innes.
He said that unless US personal consumption expenditures (PCE) data or a surprisingly hawkish Federal Reserve alter the current trajectory, gold could easily test and surpass the resistance at US$2,810 per troy ounce.
“Support is expected around US$2,760 per troy ounce, but a break above US$2,800 per troy ounce could swiftly dismantle that upper resistance,” he told Bernama.
The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade quietly next week due to the Chinese New Year festivities, according to Interband Group of Companies’ senior palm oil trader, Jim Teh.
He noted that with many traders likely to be on holiday, the price range will focus on profit-taking, generally between RM3,700 and RM4,000.
“Physical demand will come from India, Pakistan, the Middle East, the European Union, and the United States, with no shortage of palm oil expected next week,” he told Bernama.
Meanwhile, palm oil trader David Ng forecasted that the CPO market will trade sideways, owing to the shorter trading week and a lack of market cues.
“We expect prices to range between RM4,100 per tonne and RM4,280 per tonne next week,” he said. – BERNAMA
