**Gold Prices in Malaysia** Gold prices in Malaysia decreased on Monday, according to FXStreet data. The price fell to 588.56 Malaysian Ringgits (MYR) per gram, down from MYR 590.67 the previous Friday. The price per tola also went down, reaching MYR 6,864.69, down from MYR 6,889.41. For 10 grams, the price was MYR 5,885.45, and a troy ounce was priced at 18,305.82 MYR. These prices are based on international rates, converted to local currency and updated daily. FXStreet mentions that these figures serve as a reference and there may be local differences. **A Popular Asset During Uncertain Times** Gold is a popular asset because it has historically been used for value storage and exchange. People often choose gold during uncertain times and as a hedge against inflation, as it is not controlled by any government or issuer. Central banks are the main buyers, adding 1,136 tonnes worth $70 billion to their reserves in 2022. Countries like China, India, and Turkey are increasing their gold reserves to support their economies and currencies. Gold prices often move inversely to the US Dollar. When the Dollar falls, gold prices usually rise. Conversely, when stock markets do well, gold prices tend to drop. Geopolitical tensions can also increase gold prices. Gold prices have pulled back from their peak near $4,550, which seems like a brief pause before the next change. This dip is likely caused by thin holiday trading and some profit-taking as the year ends. For traders, this time offers a chance to prepare for increased volatility in early 2026. The main factor driving gold prices is the cautious outlook for the US Federal Reserve. Current market expectations suggest over a 75% chance that the first interest rate cut will happen by March 2026. As gold does not yield interest, lower rates will likely continue to support its price. This trend is supported by the ongoing weakness of the US Dollar, which moves inversely to gold. The US Dollar Index (DXY) has dropped below the important 100 level, declining over 5% since its highs earlier in 2025. A weaker Dollar makes gold more affordable for buyers using other currencies, generally boosting demand. **Political Uncertainty and Central Bank Demand** Political uncertainty around the Federal Reserve also plays a role. With Jerome Powell’s term ending in May 2026, President Trump’s upcoming nomination of a new Fed chair creates unpredictability in future monetary policy. This type of uncertainty typically increases the attractiveness of safe-haven assets like gold. Strong demand from central banks continues to underpin the market, seen throughout 2025. Following record purchases in 2022 and 2023, central banks from emerging economies are expected to add over 950 tonnes to their reserves this year, providing a solid price support and reducing significant downside risk. In the derivatives market, implied volatility remains low, making options strategies appealing. There is an increasing demand for call options with February and March 2026 expiration dates, indicating that traders are betting on a price rise. Buying call spreads could be a cost-effective way to anticipate further increases. However, a positive economic outlook for 2026 could present challenges if it boosts risk assets. The S&P 500 rose nearly 20% in 2025, and a continued risk-on environment might draw funds away from gold. Therefore, traders may also consider buying protective puts to hedge against a potential economic surprise that strengthens the dollar. Create your live VT Markets account and start trading now.

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