Gold prices in Malaysia dropped on Friday, according to FXStreet. The price per gram fell to 537.17 Malaysian Ringgits (MYR), down from 539.84 MYR on Thursday. The price for a tola also decreased to 6,265.43 MYR from 6,296.59 MYR. FXStreet’s gold prices are based on international market data and are updated daily. These prices serve as a reference point, but local rates may differ. On Friday, the price for 10 grams of gold was 5,371.69 MYR, while a troy ounce was priced at 16,707.51 MYR.

Gold as a Safe-Haven Asset

Gold is viewed as a safe-haven asset that helps preserve value, especially in uncertain economic times. It offers protection against inflation and currency drops. Central banks are big buyers, adding 1,136 tonnes in 2022, the highest annual purchase on record. Gold prices usually rise when the US Dollar and US Treasuries fall. Also, fluctuations in the stock market can influence gold prices, with rallies often driving prices down. Factors like geopolitical events, interest rates, and the strength of currencies impact gold prices. Gold generally performs better when rates are low and the Dollar is weak. Currently, gold prices in Malaysian Ringgit are slightly retreating, which is expected due to the strong US Dollar Index, holding around 107. This strength in the Dollar poses challenges for commodities priced in USD. Traders should keep a close eye on the USD/MYR exchange rate, as local gold prices feel the effects of a weaker Ringgit. The US Federal Reserve’s decision last week to maintain interest rates at 5.5% puts additional pressure on gold, making non-yielding assets less appealing. However, comments from the Fed hinted at possible rate cuts in early 2026 if economic data weakens. This introduces tension in the market, suggesting that while the short-term outlook may appear weak, there could be better conditions in the medium term.

Gold’s Appeal and Market Dynamics

Despite high borrowing costs, gold remains attractive as a hedge against inflation, especially after the latest US CPI data showed inflation unexpectedly rising to 3.4%. This ongoing inflation is a key reason why investors continue to hold gold. Current price movements indicate the market is balancing the effects of high rates against persistent inflation. A similar situation occurred in the 2022-2023 period, when high inflation and global uncertainties led central banks to buy record amounts of gold. Reports suggest that central bank buying has remained strong through the third quarter of 2025, providing support for prices. This underlying demand should not be overlooked during major price declines. Geopolitical issues, such as ongoing trade tensions in the South China Sea, continue to drive interest in gold as a safe-haven asset. The S&P 500 has been trading in a narrow range for three weeks, indicating low risk appetite. This lack of enthusiasm for stocks usually benefits gold, as investors seek to diversify. Given the opposing signals in the market, traders might want to explore strategies that take advantage of volatility rather than directional trends. Options strategies like long straddles on gold futures may be effective for capitalizing on significant price swings in either direction in the coming weeks. Keep an eye on upcoming inflation reports and comments from central banks for the next key catalyst. Create your live VT Markets account and start trading now. 

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