Gold prices in Malaysia increased on Monday, according to data from FXStreet. The price rose to 556.19 Malaysian Ringgits (MYR) per gram, up from MYR 555.05 on Friday. The cost of Gold per tola also went up to MYR 6,487.29, from MYR 6,474.02, showing how international prices affect local currency. Central banks are the largest holders of Gold, with 1,136 tonnes valued at about $70 billion in 2022. Countries like China, India, and Turkey have significantly increased their reserves to strengthen their economies.

Inverse Relationship With The US Dollar

Gold has an inverse relationship with the US Dollar and US Treasuries. When the Dollar weakens, Gold usually climbs. Gold is often seen as a safe investment and a way to protect against inflation and declining currencies. The price of Gold can fluctuate due to various reasons, including geopolitical tensions, fears of recession, and changes in interest rates. A weaker US Dollar often results in higher Gold prices, while a stronger Dollar tends to stabilize them. Market rates are updated daily, and prices are available in different measurements for local context. The recent uptick in Gold prices is part of a larger trend driven by key economic factors. With the US Dollar Index (DXY) dropping from its 2023 highs to around 101, this has lessened a major obstacle for Gold and suggests prices might rise further in the upcoming weeks. An important factor is the change in interest rate policy over the last two years. The US Federal Reserve raised rates above 5.25% in 2023 but has since cut them, making it less costly to hold non-yielding assets like Gold. As markets expect a pause or small tweaks in early 2026, Gold remains an appealing choice for investors.

Central Bank Demand And Global Economic Outlook

We must also consider the steady demand from central banks, which helps support Gold prices. Last year, central banks purchased a record 1,136 tonnes, and reports from the World Gold Council indicate this buying trend continues into 2023 and 2024. This ongoing demand, especially from emerging economies, creates a solid foundation for prices. Given current geopolitical uncertainties and predictions for slower global GDP growth in 2026, Gold’s role as a safe-haven asset is especially important. A weaker US Dollar alongside these risks strengthens the argument for holding Gold as a hedge. This makes Gold a useful tool for diversifying away from potential stock market volatility. For traders focused on derivatives, this outlook encourages a cautiously optimistic approach as we head into the new year. Buying call options that expire in the first quarter of 2026 may be a way to profit from potential price increases while managing risk. Alternatively, bull call spreads can help reduce entry costs if implied volatility is high. Create your live VT Markets account and start trading now.

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