Gold prices in Malaysia fell on Tuesday, according to FXStreet data. The price dropped to 590.18 Malaysian Ringgits (MYR) per gram, down from MYR 591.87 on Monday. The price per tola also decreased, going from MYR 6,903.50 to MYR 6,883.67. In Malaysia, gold prices are calculated based on international rates (USD/MYR) and are adjusted to the local currency. These prices are updated daily but may vary slightly from local rates.

Gold As A Safe Haven Investment

Gold has always been valued as a safe store of wealth and a means of exchange. It is often seen as a safe investment during uncertain times and acts as a hedge against inflation and currency decline. Central banks hold vast amounts of gold, purchasing 1,136 tonnes in 2022 alone. Gold prices typically move in the opposite direction of the US Dollar and US Treasuries. When these assets fall, gold usually increases, making it a useful diversification tool. Several factors can affect gold prices, including geopolitical tensions, fears of recession, interest rates, and the strength of the US Dollar. Generally, a stronger Dollar dampens gold prices, while a weaker Dollar tends to elevate them. The minor drop in gold prices to around MYR 590 per gram is just a brief fluctuation in a larger trend. There’s a tug-of-war going on between high interest rates, which put pressure on gold, and strong demand for the metal. It’s essential to focus on these larger forces rather than fixating on day-to-day price changes. The US Federal Reserve has kept interest rates steady throughout 2025 to curb inflation, which is still above 3%. This policy strengthens the US Dollar and makes gold, which doesn’t provide interest, less appealing for now. We’ve seen this pattern repeatedly during the rate hikes that began in 2022.

Central Bank Buying Spree

Despite the recent drop, there seems to be a strong support level for gold prices. Central banks continue their aggressive purchasing, adding over 800 tonnes to reserves this year, according to the World Gold Council. This ongoing demand, particularly in emerging markets, acts as a solid buffer. Geopolitical tensions also play a significant role, keeping the demand for safe-haven assets high. This uncertainty means that volatility in gold options has not decreased, even with stable prices over recent months. The market is clearly factoring in the possibility of sudden events. In the coming weeks, we might consider strategies that take advantage of this tension. For instance, selling out-of-the-money puts could help us earn premiums by leveraging strong central bank support around the $1,980 per ounce mark (about 18,350 MYR). This strategy is effective if we expect prices to remain steady or rise slightly. We should also be prepared for any changes in Fed policy heading into 2026. If signs emerge that rate cuts could happen soon, gold could rally significantly. Using long-dated call options would allow us to position ourselves for this potential upside while limiting risk if high rates last longer than we expect. Create your live VT Markets account and start trading now.

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