KUALA LUMPUR: Gold price is on fire! The precious metal continues to defy expectations, repeatedly smashing record highs as investors seek refuge from global economic turbulence.
To recap, on October 30, 2024, gold surged to an all-time high of US$2,787.61 (RM12,323) per troy ounce before settling at US$2,693.23 (RM11,906) per troy ounce in January 2025 (US$1=RM4.42).
Now, the gold has breached US$3,000 (RM13,262) per troy ounce to stand at US$3,036.74 (RM13,425) per troy ounce as of March 20, 2025, according to the goldprice.org data. The burning question is: how high can it go?
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid pointed to one key factor — uncertainty.
“Whenever fear grips the global economy, gold shines the brightest. It is not just a store of wealth but also a hedge against inflation, currency devaluation, and geopolitical instability,” he told Bernama, adding that the numbers prove it.
He pointed out that central banks worldwide have been aggressively stockpiling gold, increasing their share of total demand from a mere 1.8 per cent in 2010 to a staggering 21.0 per cent in 2024.
“This rapid accumulation — growing at a 20.2 per cent annual rate — has pushed gold prices higher.
“Against such a backdrop, gold prices would remain constructive for the foreseeable future. However, as in any asset class, it will be subjected to price fluctuation due to changes in market sentiments and risk appetite,” he added.
Meanwhile, he further explained that the Global Economic Policy Uncertainty Index soared to 339.36 points in November 2024, reflecting growing concerns over the United States Federal Reserve policies, trade tensions and political instability under Donald Trump’s second term.
“Historically, whenever economic uncertainty spikes, gold prices follow suit,” he added.
Other commodities: Rising but lagging behind gold
While gold steals the spotlight, other commodities have also experienced significant price movements.
From the writer’s observation, cocoa, for instance, surged to a 50-year high in 2024, with prices reaching US$12,906 (RM57,056) per tonne in December 2024, primarily attributed to adverse weather conditions and underinvestment in major cocoa-producing regions, leading to reduced yields and supply constraints.
As of March 20, 2025, cocoa prices stood at US$7,746.3 (RM34,245) per tonne (according to the tradingeconomics website), indicating a slight decrease but remaining elevated compared to historical levels.
Oil prices have also been volatile. On March 20, 2025, Brent crude edged up 0.2 per cent to US$71.78 (RM317) per barrel, driven by instability in the Middle East and China’s stimulus measures to bolster its economy.
Despite these fluctuations, oil prices have not mirrored the unprecedented surge observed in gold.
Coffee prices, meanwhile, have shown significant volatility, reflecting shifts in global supply chains and changing consumer demand patterns.
The price of Arabica beans reached nearly US$3.50 (RM15.47) per pound in December 2024, marking its highest level since 1977, marking a staggering 83 per cent increase in 2024.
In the palm oil sector, a significant commodity for Malaysia, palm oil has experienced price fluctuations in recent years.
After reaching an all-time high of RM7,268 per tonne in March 2022, palm oil prices have decreased by RM246 per tonne, or 5.54 per cent, since the beginning of 2025.
The decrease is largely due to adjustments in global supply and demand and evolving trade policies that have impacted major palm oil markets.
In summary, the writer opines that while commodities like cocoa, oil, coffee and palm oil have experienced significant price movements, none have matched the unprecedented surge of gold.
Gold prices continue its meteoric rise: What it means for Malaysians?
For Malaysia, the gold rush has both winners and losers.
On the bright side, gold jewellery remains a cultural staple, especially among women and those leveraging Ar-Rahnu (Islamic pawn broking), said Mohd Afzanizam.
“The rising popularity of gold-based investments has also driven more Malaysians to diversify their portfolios.
“However, sky-high prices are making gold less accessible for many consumers. We might see a shift toward alternative investments or even lower-cost jewellery options,” he said.
He noted that retailers, meanwhile, are caught in a high-stakes game. While some have thrived, others struggle to keep up with the fluctuating prices.
“Yet, competition is fierce. Take Kuala Pilah, Negeri Sembilan, for example — it has become a gold-shopping hotspot, attracting buyers from all over the country with its competitive pricing,” he said.
For Malaysians sitting on gold investments, the big dilemma remains — cash out now or hold for bigger gains?
Mohd Afzanizam said, “It depends on your financial goals. If you are investing for retirement, holding onto gold may be wise. But if you are trading, timing is everything.”
Impact on Malaysia’s jewellery industry
Malaysia Gold Association (MGA) president Datuk Wira Louis Ng said the rising gold prices have had a mixed impact on Malaysia’s jewellery industry.
On the domestic front, he said consumers have become more cautious when purchasing gold jewellery, particularly during peak seasons, such as weddings, due to the higher costs.
“However, the export sector has benefited significantly from the price surge, with gold jewellery exports reaching an estimated RM7.7 billion in 2024, driven by strong demand from key markets such as Singapore, the United Arab Emirates, Hong Kong, Japan and Australia.
“While domestic sales have faced challenges, the overall outlook for the gold jewellery sector remains positive,” he told Bernama.
Ng said jewellers in Malaysia have adjusted their pricing strategies by offering lightweight designs that require less gold, allowing customers to purchase jewellery at more affordable prices.
“In addition, many jewellers are incorporating alternative materials such as lab-grown diamonds, which provide cost-effective yet high-quality options.
“There is a growing trend of minimalist jewellery designs, as well as an increased use of materials like sterling silver and gold-plated designs, which make jewellery more accessible to price-conscious consumers,” he explained.
Ng further said that the surge in gold prices has reinforced its appeal as an investment asset.
“Retailers have responded by introducing smaller investment gold bars, such as 0.25-gram (g), 0.5 g, and 1 g, to cater to first-time investors or those looking for lower-cost entry points into gold investment.
“The popularity of these smaller denominations reflects a growing awareness among Malaysians of gold’s role in wealth preservation,” he added.
Outlook: Will gold hit US$5,000?
Some speculators predicted that gold would soar to US$5,000 (RM22,104) per troy ounce by year-end, but Mohd Afzanizam remained cautious, saying that value may take three to five years to rise.
“A more realistic target would be between US$3,000 per troy ounce and US$3,500 per troy ounce in the next few years.
“Honestly, it is hard to predict gold prices as they tend to break their all-time high records multiple times,” he said.
Meanwhile, Malaysia’s jewellery industry is adapting to the new landscape by focusing on innovation and diversification, said Ng.
“Industry players are expanding their offerings, incorporating alternative materials, and exploring new markets to remain competitive in an environment where gold prices continue to rise.
“Among the current design trends and consumer preferences include minimalist and lightweight designs and alternative materials,” he added.
