Gold demand in Malaysia remains firm despite volatile global market

PETALING JAYA: Gold continues to draw steady interest from Malaysian investors and consumers, even as geopolitical tensions in the Middle East intensify and concerns over a potential global slowdown linger, according to industry observers.

Tomei Consolidated Bhd managing director and CEO Datuk Ng Yih Pyng said demand for gold jewellery has softened somewhat following last year’s price surge, although seasonal buying during festive periods, like during the Chinese New Year, has helped cushion the impact.

“We are still anticipating some purchases for Hari Raya. The impact on jewellery demand is not significant yet, though sentiment is cautious,” he said.

At the same time, Ng noted a clear shift in buying patterns, with stronger interest in investment-grade gold such as bullion, bars and coins.

“There has been increased demand for investment in gold, but how long this can sustain, we don’t know. For now, it’s still doing okay,” he said, adding that price direction will remain closely tied to external factors including US interest rates, central bank reserve movements, geopolitical developments and oil prices.

Putra Business School associate professor Dr Ida Yasin said gold continues to appeal as a defensive asset, particularly among high-net-worth investors looking to preserve value in a volatile environment. “People who have a lot of money want to make their money work for them. They will take money from stocks or US dollars and move into gold because it is more stable.”

She added that broader structural shifts – including ongoing discussions among BRICS nations around alternative, gold-linked currency frameworks – are reinforcing interest in the metal. At the same time, underlying supply and demand dynamics remain supportive.

“Supply is relatively stable, but demand is strong. That is why prices are rising. Investors are reallocating away from US currency and equities in uncertain markets and moving into gold as a safe haven,” she said, projecting that the upward trend could persist over the next six months.

On the ground, retailers are seeing this trend play out in real time.

Habib Jewels executive chairman and CEO Datuk Seri Meer Habib said recent developments in the Middle East initially pushed prices higher, before a period of consolidation as the US dollar and oil prices adjusted.

“Gold and the US dollar have both been volatile. The conflict lifted oil prices, which strengthened demand for the dollar and in turn capped some of gold’s gains.”

Despite these fluctuations, he said, local demand has remained firm.

“Among Malaysian consumers, it’s still a good time to buy. Prices are reasonable, especially during the Hari Raya period. Our outlets have been very crowded, with some items selling out. Demand is strong,” he added.

Meer, however, cautioned that near-term price movements will remain difficult to predict, given the uncertain geopolitical backdrop. He pointed to continued central bank buying as a key structural support.

“Central banks are still accumulating gold, partly due to de-dollarisation trends. Many countries are shifting reserves away from the US dollar, and that continues to support prices,” he said.

Industry observers note a growing divergence between investment demand and jewellery sales. While higher prices have tempered discretionary purchases, demand for physical gold as an investment has accelerated.

“We need to watch the post-Raya period, from April to May, to get a clearer picture once the festive effect fades,” Ng said.

Looking ahead, analysts expect several factors to shape gold prices through the rest of 2026, including US monetary policy, central bank reserve strategies, geopolitical developments and movements in oil prices.

“Higher oil prices feed into inflation and costs, which can reinforce gold’s role as a safe-haven asset. Even Malaysia, as an oil-producing country, will feel the effects if the situation drags on,” Ng said.

For now, gold continues to serve as a preferred hedge for both investors and more cautious consumers. While short-term movements may remain uneven, underlying demand and sustained central bank activity are likely to keep the broader outlook intact.