Gold prices in Malaysia rose on Monday, according to FXStreet. The price reached 647.48 Malaysian Ringgits (MYR) per gram, up from MYR 635.82 on Friday. For a tola, the price increased to MYR 7,552.10 from MYR 7,416.10. FXStreet calculates gold prices by adjusting international figures to the local currency and updates them daily based on market rates. Gold has been a valuable asset and a form of exchange for many years. Today, it is seen as a safe-haven investment during tough times and a protection against inflation. Central banks hold large amounts of gold to enhance their economic image. In 2022, central banks acquired 1,136 tonnes of gold, the highest annual purchase on record.

The Relationship Between Gold, the US Dollar, and Risk Assets

Gold prices move in the opposite direction of the US Dollar and risk assets. When the Dollar declines, gold tends to rise, offering a way to diversify during market uncertainty. Factors like geopolitical situations and interest rates influence gold prices. Lower interest rates usually drive up gold prices, and the strength of the US Dollar also affects gold. A strong Dollar keeps gold prices steady, while a weaker Dollar can cause prices to rise. Gold prices are showing strength not only in global markets but also in local currencies like the Malaysian Ringgit. This increase reflects a larger trend beyond just one day of trading. It indicates a rising interest in safe-haven assets as we approach the new year. The primary factor driving this trend is the changing outlook on interest rates. After the US Federal Reserve kept rates steady through most of 2025, the market now expects potential rate cuts later this year. This shift makes government bonds less appealing and boosts the attractiveness of non-yielding assets like gold.

Central Bank Purchases and Gold Price Stability

This trend is supported by significant and ongoing buying from central banks. Following record purchases of over 1,000 tonnes in both 2022 and 2023, demand from official sectors remained very strong through 2025. This consistent buying creates a solid price foundation and reduces risk for traders. For those trading derivatives, this suggests a possible rise in volatility in the coming weeks. We think buying call options on gold futures, due in the second quarter of 2026, offers a low-risk way to prepare for a potential price surge. This strategy allows investors to benefit from price increases while limiting initial risk. The weakening US Dollar also provides a major boost for gold. The Dollar Index has dropped from its 2025 highs, recently trading below the 102 mark, which makes gold cheaper for buyers holding other currencies. This currency trend, along with ongoing geopolitical tensions from last year, strengthens the argument for higher gold prices. Create your live VT Markets account and start trading now.

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