Gold prices in Malaysia fell on Friday, according to FXStreet data. The price per gram decreased to 537.17 Malaysian Ringgits (MYR) from 539.84 MYR on Thursday, and the price per tola dropped to 6,265.43 MYR from 6,296.59 MYR.

Gold prices calculated by FXStreet are based on international prices and are updated daily. They provide a reference point, with local rates potentially varying. As of Friday, the price for 10 grams of Gold was 5,371.69 MYR, and a troy ounce was priced at 16,707.51 MYR.

Gold as a Safe-Haven Asset

Gold is considered a safe-haven asset used for value preservation and during times of economic uncertainty, sought as protection against inflation and currency depreciation. Central banks are major buyers, adding 1,136 tonnes in 2022, the highest recorded annual purchase.

Gold prices tend to move inversely to the US Dollar and US Treasuries, often rising when the Dollar depreciates. Stock market fluctuations also affect Gold, with rallies typically reducing its price. Price influences include geopolitical events, interest rates, and currency strength, with Gold favouring lower rates and a weak Dollar.

We’re seeing gold prices in Malaysian Ringgit pull back slightly, which isn’t surprising given the US Dollar Index is currently firm, hovering around 107. This dollar strength is a key headwind for commodities priced in USD. Traders should watch the USD/MYR exchange rate closely, as local gold prices are buffered by Ringgit weakness.

The US Federal Reserve’s decision last week to hold interest rates at 5.5% continues to pressure gold, as it makes non-yielding assets less attractive. However, their commentary hinted at a potential pivot to rate cuts in the first quarter of 2026 if economic data softens. This creates a tension in the market, suggesting that while the short-term trend may be weak, the medium-term outlook could be supportive.

Gold’s Appeal and Market Dynamics

Despite high borrowing costs, gold’s appeal as an inflation hedge is being tested by the latest US CPI data, which showed inflation unexpectedly ticking up to 3.4%. This persistent inflation is a primary reason investors are holding onto gold positions. The current price action reflects the market weighing the impact of high rates against stubborn inflation.

We saw a similar dynamic back in the 2022-2023 period, where high inflation and geopolitical uncertainty led central banks to purchase gold at record levels. We’re seeing reports that central bank buying has remained robust through the third quarter of 2025, providing a solid floor for prices. This underlying demand should not be underestimated during any significant price dips.

Geopolitical factors, particularly ongoing trade tensions in the South China Sea, are keeping the safe-haven bid alive. The S&P 500 has been trading in a tight range for the past three weeks, indicating risk appetite is low. This lack of enthusiasm for equities typically benefits gold as investors seek to diversify.

Given these conflicting signals, traders might consider strategies that benefit from volatility rather than a clear directional move. Options strategies like long straddles on gold futures could be useful to capitalize on a significant price swing in either direction over the coming weeks. Pay close attention to upcoming inflation reports and central bank commentary for the next major catalyst.

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