Gold prices in Malaysia have recently gone up. Data shows that the price has risen to 561.72 Malaysian Ringgits (MYR) per gram, up from 560.86 MYR. The price per tola has also increased to MYR 6,551.86 from MYR 6,541.73. These changes reflect the influence of international prices on the local market, as reported by FXStreet. **Gold as a Safe Haven Asset** Gold is known as a safe-haven asset and serves as a protection against inflation. It often gains popularity during uncertain times. Central banks buy gold to strengthen their economies by increasing their reserves. In 2022, they purchased 1,136 tonnes of gold, worth about $70 billion. China, India, and Turkey were the top buyers. Gold’s price tends to move opposite to the US Dollar and US Treasuries, as well as risk assets like stocks. Events like geopolitical instability or worries about a recession usually boost the demand for gold. Since gold does not earn interest, its value rises when interest rates are low and falls when rates are high. A weak US Dollar generally leads to higher gold prices. The current rise in gold prices to 561.72 MYR per gram indicates growing global interest in safe-haven assets. This trend seems to be a response to renewed geopolitical tensions in the South China Sea and concerns about slow global economic growth. These factors suggest strong support for the ongoing increase in gold prices. Additionally, changes in US interest rates significantly impact gold prices. The Q3 2025 GDP growth in the US was reported at just 1.5%, while inflation cooled off to 2.8%. Markets are now anticipating a potential Federal Reserve rate cut by mid-2026, making gold more appealing as an asset. **Strong Demand from Institutional Buyers** We are also seeing strong demand from large institutional buyers, which helps maintain a stable price. According to the World Gold Council’s latest data for Q3 2025, central banks around the world added another 250 tonnes to their reserves. This trend began to rise sharply in 2022 and reflects a long-term strategy of moving away from reliance on the US Dollar. The expectation of lower US interest rates is putting pressure on the dollar, further boosting gold prices. The US Dollar Index (DXY) has fallen below 100, a key psychological level, making gold cheaper for buyers using other currencies. For those trading derivatives, this signals that implied volatility in gold options could rise in the coming weeks. Given the strong upward trend and clear market drivers, buying call options or using bull call spreads could be a good strategy for capitalizing on potential price increases. It appears the market is breaking out of the limited trading patterns we saw over the summer of 2025. This situation resembles late 2023 when fears of a US recession led to changes in Federal Reserve expectations and a notable gold rally. Traders who prepared for higher gold prices during that time benefited from the shift in monetary policy. The current mix of geopolitical risks and a dovish central bank outlook offers a similar opportunity. Create your live VT Markets account and start trading now.

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