Gold prices in Malaysia have recently increased, with data showing a rise to 561.72 Malaysian Ringgits (MYR) per gram from 560.86 MYR. The price per tola also rose to MYR 6,551.86 from MYR 6,541.73. These prices reflect the adaptation of international prices into the local currency by FXStreet.

Gold as a Safe Haven Asset

Gold is recognised as a safe-haven asset and a hedge against inflation, often attracting increased interest during volatile times. Central banks are major purchasers, bolstering their economies’ perceived strength by adding Gold to their reserves. In 2022, they acquired 1,136 tonnes, valued at around $70 billion, with China, India, and Turkey leading the increase.

Gold’s price is inversely related to the US Dollar and US Treasuries, as well as risk assets like stocks. Economic events, such as geopolitical instability or recession fears, often increase demand for Gold. As a yield-less asset, Gold tends to rise with lower interest rates and is suppressed by higher rates. The US Dollar’s strength plays a role, with a weak Dollar typically leading to increased Gold prices.

The recent rise in gold prices, now at 561.72 MYR per gram, reflects a growing global interest in safe-haven assets. We see this as a reaction to both the renewed geopolitical tensions in the South China Sea reported last week and concerns about slowing global economic growth. This environment suggests that the upward trend we are seeing has strong fundamental support.

This price movement is also heavily influenced by the changing outlook for US interest rates. With US Q3 2025 GDP growth reported at a sluggish 1.5% and inflation cooling to 2.8%, markets are now pricing in a potential Federal Reserve rate cut by mid-2026. As a non-yielding asset, gold becomes more attractive when interest rates are expected to fall.

Strong Demand from Institutional Buyers

We are also seeing continued strong demand from institutional buyers, which creates a solid price floor. The World Gold Council’s latest data for Q3 2025 showed that central banks globally added another 250 tonnes to their reserves. This continues the aggressive purchasing trend we first saw spike back in 2022, signaling a long-term strategy to diversify away from the US Dollar.

The expectation of lower US interest rates is simultaneously putting pressure on the dollar, a key catalyst for gold. The US Dollar Index (DXY) has just fallen below the 100 level, a significant psychological and technical break. This dollar weakness makes gold cheaper for buyers using other currencies, further boosting its appeal.

For derivative traders, this suggests implied volatility in gold options will likely increase in the coming weeks. Given the strong upward momentum and clear catalysts, buying call options or using bull call spreads could offer a defined-risk way to capitalize on potential price gains. We believe the market is breaking out of the range-bound trading pattern we observed over the summer of 2025.

This situation is similar to what we observed in late 2023, when fears of a US recession prompted a pivot in Fed expectations and a significant gold rally. Traders who positioned for higher gold prices at that time benefited from the shift in monetary policy. The current combination of geopolitical risk and a dovish central bank outlook presents a comparable opportunity.

Create your live VT Markets account and start trading now.