Insights 
VT 
Gold prices in Malaysia decreased on Monday, with the cost per gram dropping to 453.06 Malaysian Ringgits (MYR), down from MYR 459.30 on Friday. The price per tola decreased to MYR 5,284.39 from MYR 5,357.15.
Gold is considered a valuable asset historically used as a store of value and medium of exchange. It is also seen as a safe-haven asset during uncertain times, and a hedge against inflation and currency depreciation.
Central Bank Influence
Central banks are the largest buyers of gold, holding it to diversify reserves and strengthen economic perceptions. In 2022, central banks added 1,136 tonnes of gold, valued at approximately $70 billion, marking the largest annual purchase recorded.
Gold has an inverse correlation with the US Dollar and US Treasuries. When the Dollar weakens, Gold prices tend to rise, while stronger dollars often suppress Gold prices. Geopolitical instability and economic recessions can cause Gold prices to escalate. Lower interest rates can raise the gold price, as it is a yield-less asset.
Gold prices are influenced primarily by the performance of the USD, as they are priced in dollars. A weaker Dollar usually results in increased Gold prices.
The recent drop in local gold prices—from MYR 459.30 per gram last week to MYR 453.06 now—reflects broader shifts in global expectations. A similar move was noted in the price per tola, which fell by over MYR 70 during the same period. This decline seems in step with a firmer US Dollar and growing talk around interest rate guidance, particularly in the US Treasury yields space.
As we’ve often found, gold behaves in direct contrast to the dollar. When the greenback strengthens, the precious metal feels the weight. That’s perhaps what we’re seeing here. Investors tend to shift towards dollar-based or interest-bearing assets when rates rise or when the economic outlook implies stability in monetary tightening cycles. In essence, when yields on US Treasuries get more attractive, gold—with no yield of its own—loses some appeal.
At the same time, macroeconomic signals have been relatively steady. There hasn’t been a fresh wave of geopolitical breakdowns or unexpected inflation surges, both of which usually send gold higher. In that sense, the safe-haven demand appears to have taken a pause. Without clear headlines driving fear or currency instability, we may see gold stay within a narrower band in the near term.
Future Projections and Strategies
That said, it’s important to watch the central bank footprint. Over the past year, their role has become more assertive. With over 1,100 tonnes bought in 2022 alone, demand from institutional coffers has kept undercurrents of support beneath prices, even during speculative pullbacks. So, while lower prices could make for attractive entry levels, the momentum will depend largely on Dollar flows and rate commentary.
We should be watching upcoming FOMC releases closely. If dovish tones start to surface again, gold could find a leg up. However, don’t expect explosive moves unless there’s a sudden economic data miss or liquidity event. Those signals usually push short-term hedgers toward commodities.
From a derivatives perspective, short-term positioning should reflect that gold tends to retrace quite quickly. Use tightening stops on any bullish exposure and allow room for potential mean-reversion if overreaction to macro news appears in the market. For those structuring options, implied volatility might remain low unless newsflow brings new uncertainty. In that event, long-vol strategies can become more attractive by comparison.
We’re also paying attention to correlations—it’s not just the Dollar, but correlations to equity indices and even energy markets can drive price swings. Of note lately, oil softness has corresponded with slight gold weakness. This could extend if broader commodity buckets lose strength, which would remove one layer of tail-risk demand from gold.
Ultimately, while the recent decline in Malaysian gold pricing offers a local-context update, the drivers remain globally pegged. Traders should operate with that in mind, structuring risk around inflation neutral scenarios, range-bound rates, and a Dollar that could still whipsaw on shifting sentiment.
