Insights 
VT 
Gold prices in Malaysia remained mostly unchanged, with the price at 547.18 Malaysian Ringgits (MYR) per gram compared to 547.61 MYR on the previous day. The price per tola is now 6,382.22 MYR, slightly down from 6,387.18 MYR.
FXStreet calculates Malaysian Gold prices by adapting international prices to the local currency and measurement units. These prices are reference points only and may vary locally.
The Value of Gold
Gold is universally valued as a store of wealth and a medium of exchange. Apart from jewellery, it is considered a safe-haven asset and a hedge against inflation and currency devaluation.
Central banks are the largest holders of Gold, buying 1,136 tonnes in 2022 worth approximately $70 billion. Emerging economies like China, India, and Turkey are rapidly increasing their Gold reserves.
Gold is inversely correlated with the US Dollar and US Treasuries. It rises when the Dollar weakens, allowing diversification in economic uncertainty. Geopolitical issues or recession fears can drive prices up, as can lower interest rates. Conversely, higher interest rates and a strong Dollar can keep prices in check.
Gold’s current stability around 547 MYR per gram suggests the market is consolidating before its next major move. This flat pricing presents an opportunity to position for future volatility, which will likely be driven by US monetary policy. We are closely watching for any signs of a shift from the Federal Reserve.
Impact of US Economic Indicators
Last week’s US jobs report showed a significant slowdown, fueling speculation that the Fed will pause its rate-hiking cycle. We remember how the aggressive hikes of 2022 and 2023 capped gold prices, so any pivot would weaken the dollar. A softer dollar is historically a primary catalyst for higher gold prices.
We also see strong underlying support from central bank demand, which has remained robust since the record purchases of 2022. The World Gold Council confirmed that central banks globally added another 950 tonnes in 2024. This consistent buying creates a solid price floor and limits downside risk.
Given this backdrop, we anticipate a rise in volatility in the coming weeks. Traders might consider buying call options to capitalize on a potential upward break driven by a weaker dollar. Alternatively, strategies like long straddles could be effective to play a significant price move in either direction.
The broader market sentiment is also shifting, as seen with the VIX index rising to 22 this week. This growing nervousness in equities could trigger a flight to safety. As a primary safe-haven asset, gold is well-positioned to benefit from any sell-off in riskier markets.
