Soaring prices and global uncertainties can’t stop buying frenzy
PETALING JAYA: All that glitters is gold these days, with investors in a buying frenzy for the prized commodity.
Soaring gold prices and global uncertainties are fuelling the appetite for the traditional safe-haven asset.
“There is still a lot of interest in investment for (gold) bars,” said local jeweller Tomei Consolidated Bhd managing director Datuk Ng Yih Pyng.
Ng, who is also the adviser of the Federation of Goldsmiths and Jewellers Association of Malaysia, said the uptake for jewellery usually slows down after the festive season.
On whether he expects prices to rise, he said the outlook for gold remains bullish and central banks too are increasing their gold reserves.
“As long as central banks are buying, the chances for gold (prices) to come down is difficult,” he said.
Rakuten Trade Sdn Bhd head of research Kenny Yee Shen Pin said the interest in gold as an asset class may be fuelled by the forecast that the price of gold will hit US$5,000 (RM21,880) per troy ounce by year end.
“I think gold is seeing unprecedented buying support over the last year,” he said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the demand for gold from global central banks has increased by 20.2% per annum, based on a compound annual growth rate (CAGR) from 2010 to 2024.
“At the same time, we also see that the share of US dollar global forex reserve share has gone down from more than 70% in the 1990s to 58% in 2024.
“On that note, the de-dolarisation has occurred and it seems that gold has become prominent, especially among the central banks,” he said. (De-dollarisation refers to nations reducing reliance on the US dollar as a reserve currency.)
“It also appears that the current uncertainties over US tariffs have compromised confidence in the United States as the safe haven status. So, the tariff war would actually accelerate the de-dolarisation,” he added.
Sunway University economics professor Dr Yeah Kim Leng said the uncertainties, especially with US President Donald Trump’s tariffs, have fuelled the demand for safe-haven assets.
“Gold is a safe-haven asset that experiences strong demand and price increases during uncertain times such as that being experienced now with Trump’s unprecedented unilateral tariff hikes,” he said.
“Besides uncertainty, another major factor causing the rise in gold prices is de-dollarisation as central banks, particularly China, shift reserve holdings from US Treasuries to gold in light of worsening US economic fundamentals such as rising fiscal deficits and debts,” he added.
Spot gold briefly hit a record high of US$3,500 per troy ounce (RM15,444) on Tuesday before easing and trading at the US$3,299.69 (RM14,420) mark yesterday.
JP Morgan has predicted that gold prices could breach US$4,000 per troy ounce by 2Q26 although some analysts are already looking at US$5,000 per troy ounce by the year-end.
