In the face of global financial uncertainty, an increasing number of Malaysians are turning to gold as a safe haven to protect their wealth. This shift is driven by a combination of geopolitical tensions, inflation concerns, and a growing distrust of traditional financial assets. From seasoned investors to younger, tech-savvy buyers, gold is gaining traction not only as a luxury item but also as a strategic financial asset.
Gold Demand Amid Market Uncertainty
With the U.S. imposing trade tariffs on China and fears of a global trade war, gold prices have surged, recently surpassing USD 2,900 (RM 12,855) per ounce. This price jump underscores the growing global appetite for gold as a safe-haven asset. As market volatility and geopolitical instability intensify, many Malaysians are increasingly seeing gold as a dependable investment.
Datuk Seri Meer Sadik Habib, Executive Chairman of Habib Group, observed this growing demand firsthand. “In uncertain times, people gravitate towards gold,” he said, emphasizing that it is no longer just an ornamental purchase but a financial strategy. Alongside traditional gold jewelry, there is a notable rise in the popularity of gold bars, dinars, and even gold gifts as investment tools. One dinar, worth around RM 1,900, has proven to be a resilient store of value, appreciating 20 to 30 percent in just one year.
Gold as a Hedge Against Inflation
Gold has long been a trusted hedge against inflation, a role it continues to play today. “Historically, gold retains its purchasing power,” said Meer Sadik. He illustrated this with the example of the dinar, which has had the same purchasing power for over 1,400 years. As paper currency continues to lose value, gold stands firm, making it an attractive investment, especially amid inflationary pressures.
Gold prices surged 27 percent in 2024 and have gained an additional 11 percent in early 2025. While short-term fluctuations are inevitable, gold’s long-term upward trajectory is evident. Yasheedah Yashaiya, head of business development at Malabar Gold & Diamonds in Malaysia, echoed this sentiment, highlighting how central banks globally have been accumulating gold at the fastest pace in over 50 years.
Geopolitical Tensions Fuel Gold’s Record Highs
Global geopolitical factors play a significant role in the current gold rally. From the Russia-Ukraine conflict to tensions in the Middle East and the strained U.S.-China relationship, these uncertainties have heightened the demand for gold as a safe haven. Gold prices have surged over 60 percent since 2020, reflecting its resilience during periods of turmoil.
Currency depreciation has also made gold a more attractive option. As the value of local currencies drops, investors are increasingly seeking to protect their assets by shifting funds from traditional currency-based investments to gold.
Shifting Investment Preferences: From Jewelry to Gold Bars and Coins
The Malaysian gold market is undergoing a shift. While jewelry remains a popular purchase, there is a notable increase in demand for gold bars and coins. Datuk Abdul Rasul Abdul Razak, President of the Malaysian Indian Goldsmith and Jewellers Association, reported that investors now account for 70 percent of gold buyers, up from just 30 percent previously. For many, gold bars and bullion offer a more stable and lucrative investment, particularly as the price of gold continues to climb.
Younger investors are also entering the gold market, often purchasing gold bars or coins using savings or family support. Even those from the B40 and M40 income groups, who traditionally bought small amounts of gold jewelry, are now shifting towards investment-grade gold as prices soar.
Gold’s Long-Term Value
Despite recent price hikes, gold remains a solid long-term investment. “Gold’s value never depreciates,” said Abdul Rasul. Unlike stocks or currencies that experience fluctuations, gold has consistently proven itself as a reliable store of wealth.
For newcomers to the gold market, Meer Sadik recommends starting with smaller pieces, such as a 1-gram gold bar or a dinar, to familiarize themselves with the market. By keeping an eye on global economic trends, which directly impact gold prices, investors can better navigate the market and preserve their purchasing power over time.
Conclusion
Gold’s role as a safe-haven asset continues to solidify in Malaysia, driven by geopolitical risks, inflation, and economic instability. With increasing demand across various segments of society, from traditional jewelry buyers to younger investors seeking digital platforms for gold purchases, the gold market in Malaysia is thriving. Despite rising prices, gold’s long-term value as a resilient and reliable investment remains undeniable.
Related topics:
- Knowing the Weight of Gold: How Many Grams in a Troy Ounce?
- Why Are Gold Coins Different Prices?
- How to Know Gold Purity?
