Gold prices in Malaysia dropped on Thursday, with FXStreet data indicating a decrease to 620.25 Malaysian Ringgits (MYR) per gram from the previous day’s price of MYR 627.02. Similarly, the price per tola fell to MYR 7,236.06 from MYR 7,313.46.
FXStreet calculates these prices by adapting international gold prices to the local currency and measurement units, updating them daily based on current market rates. It is important to note that these prices serve as a reference and local prices may differ slightly.
Gold as a Safe Haven Asset
Gold serves as a safe-haven asset, widely used throughout history as a store of value. It is particularly valued for its role in hedging against inflation and currency depreciation. Central banks hold the largest reserves of gold, significantly increasing their holdings in recent years, with purchases totalling 1,136 tonnes, valued at approximately $70 billion, in 2022.
The price of gold often inversely correlates with the US Dollar and other risk assets. Geopolitical tensions and interest rate variations also influence gold prices, as it is priced in US Dollars and lacks yield. A weaker Dollar typically sees gold prices rise, while a stronger Dollar tends to suppress them.
We are seeing gold prices dip, as shown by the recent drop to MYR 620.25 per gram. This weakness is directly tied to the strength of the US dollar, which is rallying on the back of strong economic data. For instance, the US jobs report for January 2026, released just last week, showed the economy added over 300,000 jobs, pushing back expectations of any imminent interest rate cuts.
Federal Reserve and Central Bank Demand
As a yield-less asset, gold struggles when interest rates stay higher for longer. Given the robust economy, we believe the Federal Reserve will likely hold its current stance, making dollar-denominated assets more attractive than gold. This environment suggests that derivative traders could consider selling call options or establishing other bearish positions to capitalize on potential near-term price stagnation or declines.
However, we must not ignore the strong underlying demand from central banks, which provides a solid floor for prices. Looking back at 2025, we saw central banks collectively purchase over 1,000 tonnes of gold, continuing the record-breaking buying trend from the previous few years. This persistent buying from official institutions could limit significant downside and should be factored into any strategy.
We should also remember gold’s role as a safe-haven asset during turbulent times. Any unexpected geopolitical flare-up could quickly reverse the current price trend, much like how prices surged during the initial uncertainty we experienced back in 2022. Therefore, maintaining some protective put options or utilizing tight stop-losses on any short positions is a prudent approach in the coming weeks.
