Gold prices in Malaysia rose on Monday. FXStreet reported the rate at 563.49 Malaysian Ringgits per gram, up from 560.92 MYR on Friday. The price per tola also increased from 6,542.41 MYR to 6,572.30 MYR. FXStreet calculates gold prices by converting international rates (USD/MYR) into local currency and units, updating these figures daily. These prices are for reference, and local rates may vary slightly.

Gold as a Safe Haven

Gold is viewed as a reliable store of wealth and a medium of exchange, especially during economic uncertainty. It serves as a hedge against inflation and currency depreciation because its value is independent of any issuer or government. Central banks, particularly in emerging economies like China, India, and Turkey, are the main holders of gold. In 2022, they purchased a record 1,136 tonnes to enhance their currencies and economic stability. Gold typically moves in the opposite direction of the US Dollar and US Treasuries. It tends to rise when the Dollar weakens or during times of market risk. Fears of recession or declining interest rates can also increase gold’s value. Its price, expressed in XAU/USD, is heavily influenced by the strength or weakness of the Dollar. Today, gold prices are trending upward, with the local price per gram at 563.49 MYR. This aligns with the global trend, as gold is recognized for its safe-haven status during turbulent times. For traders, this short-term momentum indicates that supportive factors are coming into play.

Gold and Interest Rate Outlook

The market is beginning to expect interest rate cuts from the U.S. Federal Reserve in the first half of 2026, marking a significant change from the tightening cycle that ended in 2024. Gold, as a non-yielding asset, becomes more appealing when interest rates are projected to drop. This outlook suggests that long-dated futures and call options could benefit from this potential monetary policy change. We should also acknowledge the strong physical demand that has helped keep prices steady for years. After the record central bank purchases of 1,136 tonnes in 2022, buying by official sectors has remained notably high, with over 800 tonnes added to global reserves in 2024. This ongoing demand creates a solid support for prices, limiting downside risks for long-term positions. The inverse relationship with the U.S. Dollar is crucial right now. The U.S. Dollar Index (DXY) recently fell below 98, reflecting market expectations about future rate cuts. A weaker dollar makes gold cheaper for foreign currency holders, typically increasing demand and driving prices up. This surge in gold prices coincides with a slowdown in equity markets, as the S&P 500 struggles to maintain previous gains from earlier in 2025. Ongoing geopolitical instability continues to encourage investors to hedge their bets. Therefore, using options to build positions in gold may serve as a strong defense against potential downturns in riskier assets. Create your live VT Markets account and start trading now.

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