Gold prices in Malaysia dropped on Friday, according to FXStreet data. The price per gram decreased to 561.79 Malaysian Ringgit (MYR) from 563.09 MYR the day before. The price for Gold per tola also fell, going from MYR 6,567.77 to MYR 6,552.55. FXStreet calculates Gold prices by adjusting international rates (USD/MYR) to the local currency, updating them daily.

Central Bank Purchases

Central banks are significant Gold buyers, having added 1,136 tonnes worth around $70 billion to their reserves in 2022. Banks in China, India, and Turkey have rapidly increased their Gold holdings. Gold prices tend to move opposite to the US Dollar and US Treasuries. When the Dollar weakens, Gold prices usually rise. This metal often performs well during market downturns because it is considered a safe investment. Gold prices respond to many factors, like geopolitical tensions and interest rates. A strong US Dollar tends to keep Gold prices stable, while a weaker Dollar can drive them higher. Today’s slight drop in gold prices seems like a minor setback, not a trend change. The broader market is expecting a dovish stance from the Federal Reserve, which continues to support Gold prices. This situation might present a good opportunity for investors anticipating price increases.

Federal Reserve Influence

Recent comments from the Federal Reserve indicate that rate cuts may happen in the first half of 2026, especially since the Consumer Price Index (CPI) for November 2025 was 2.9%. Generally, lower interest rates reduce the cost of holding non-yielding assets like Gold. We believe the market is now preparing for at least two rate cuts in the next year. Demand from central banks provides a solid support level for Gold prices, a trend we’ve noted since their record purchases in 2022. Continuing strong buying is expected through 2023 and 2024, with 2025 figures showing an additional 950 tonnes added to global reserves so far. This consistent buying from official sources helps absorb any short-term selling pressure. With this outlook, we are observing more implied volatility in Gold options markets. Traders might want to consider buying call options or setting up bull call spreads to take advantage of potential price increases while managing their risk. These strategies are becoming more appealing as we approach year-end and predict the Fed’s next moves. The main risk to this view is an unexpected rise in the US Dollar, which negatively affects Gold prices. Although the Dollar Index has weakened recently, dropping below 103 last week, any signs of economic strength could quickly reverse this trend. Therefore, keeping an eye on currency markets is crucial for timing Gold trades. Create your live VT Markets account and start trading now.

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