Insights 
VT 
Gold prices in Malaysia increased on Monday, with FXStreet reporting the rate at 563.49 Malaysian Ringgits per gram, up from 560.92 MYR on Friday. The price per tola also rose to 6,572.30 MYR from 6,542.41 MYR.
Gold prices are calculated by FXStreet by converting international rates (USD/MYR) to local currency and units, updated daily. These prices are for reference, and local rates might vary slightly.
Gold as a Safe Haven
Gold is seen as a valuable store of wealth and a medium of exchange, often acting as a safe-haven asset during economic turmoil. It is considered a hedge against inflation and currency depreciation since its value isn’t tied to any issuer or government.
Central banks, particularly from emerging economies such as China, India, and Turkey, are the primary holders of Gold. They purchased 1,136 tonnes in 2022, the highest on record, to strengthen currency and economic perceptions.
Gold generally has an inverse relationship with the US Dollar and US Treasuries. It increases when the Dollar depreciates or in times of market risk, while fears of recession or lower interest rates can also boost Gold’s value. Its pricing, in XAU/USD, relies heavily on the Dollar’s strength or weakness.
We are seeing gold prices strengthen today, with the local price per gram reaching 563.49 MYR. This move is consistent with the global trend, as the metal is valued for its role as a safe-haven asset in turbulent times. For traders, this short-term momentum signals that underlying supportive factors are taking hold.
Gold and Interest Rate Outlook
The market is now anticipating potential interest rate cuts from the U.S. Federal Reserve in the first half of 2026, a major shift from the tightening cycle we saw end in 2024. As a non-yielding asset, gold becomes more attractive when interest rates are expected to fall. This outlook suggests that long-dated futures and call options could be positioned to benefit from this monetary policy shift.
We must also recognize the strong physical demand that has supported prices for several years now. Since the record central bank purchases of 1,136 tonnes back in 2022, official sector buying has remained historically high, with reports showing over 800 tonnes were added to global reserves in 2024. This consistent demand provides a solid floor for prices, potentially limiting downside risk for long positions.
The inverse correlation with the U.S. dollar is a critical factor right now. The U.S. Dollar Index (DXY) recently dipped below the 98 mark, reflecting market sentiment about future rate cuts. A weaker dollar makes gold cheaper for holders of other currencies, which typically increases demand and pushes prices higher.
This rally in gold is also happening as equity markets show signs of exhaustion, with the S&P 500 struggling to build on gains from earlier in 2025. Persistent geopolitical instability continues to drive hedging activity among investors. Consequently, using options to build positions in gold could serve as an effective hedge against potential downturns in riskier assets.
