Gold prices in Malaysia increased on Wednesday. The cost for one gram rose to 632.70 Malaysian Ringgits, up from 620.34 MYR on Tuesday. For a tola, the price went up to 7,379.74 MYR from 7,235.50 MYR the day before. FXStreet calculates local prices by adjusting international market rates. Daily updates show market values at the time of publication, but local prices may vary slightly.

Gold as a Safe Haven

Gold is seen as a reliable store of value and a safe-haven asset, especially in uncertain times. It is often used to protect against inflation and currency decline. Central banks hold the most gold, seeking to strengthen their currencies. In 2022, they purchased 1,136 tonnes, the highest amount in a single year. Countries like China, India, and Turkey have notably increased their gold reserves. Gold prices typically move in the opposite direction of the US Dollar and Treasuries. When the Dollar weakens, gold prices usually rise, providing a diversification option. Factors affecting gold prices include geopolitical events, interest rates, and the strength of the Dollar. A strong Dollar often keeps gold prices low, while a weaker Dollar can drive them up. Currently, gold prices are rising, aligning with its traditional role as an inflation hedge. Recent inflation data from December 2025 showed a rate of 3.4%, slightly above expectations. This could lead traders to explore call options or bull call spreads to benefit from further price increases in the upcoming weeks.

Institutional Buying and Market Dynamics

The strength in gold prices is supported by significant buying from institutions, especially central banks. In 2025, central banks aggressively purchased gold, adding over 800 tonnes to global reserves, according to the World Gold Council. This consistent demand creates a solid support level for gold, making short selling risky at this time. The recent behavior of the US Dollar also plays a vital role in gold pricing. After interest rate cuts in late 2025, the Federal Reserve has taken a more cautious approach, creating uncertainty about future actions. This uncertainty could cause increased volatility in gold, making strategies like long straddles, which profit from price movement in either direction, appealing. Given gold’s status as a safe haven, it is becoming increasingly relevant as a hedge in investment portfolios. With stock markets showing signs of fatigue after last year’s strong performance, maintaining long positions in gold through futures or options can help mitigate potential stock market losses. Any rise in geopolitical tensions could heighten this flight-to-safety trend, pushing gold prices even higher. Create your live VT Markets account and start trading now.

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