Investing gold in Malaysia and why you should get into it!

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In Malaysia (and many other Asian communities), it is very common to receive gold during weddings. They are used as a sign of prosperity and good luck but because they carry value, they can be used for emergencies too.

A more stable investment engine

Anyone would know that gold has been used as a form of investment for the longest time. It is among the most widely used precious stones being traded across the world, offering one of the safest investment options around. Its price is known to appreciate steadily although it is not known to change too drastically.

Price of gold in 2021

In Malaysia, the market price of gold is published by the Bank Negara Malaysia and as of February 2021, 1 oz of gold was hovering around the 7,300 price level. To put this in context, the price of gold in Malaysia has been increasing since 2019 started and around mid-2020, it reached an all-time high and that was in the middle of the COVID-19 pandemic. That said, would gold be a good option to put your money in?

Influencing factor to the price of gold

It is often said that you can never go wrong when you invest in gold. Whether you are in Malaysia or in other countries, gold is internationally accepted and the price is consistent with its global platforms. The following factors have implications on the gold prices.

  • Economy and inflation – Meanwhile, you need to be aware of inflation. When the economy faces high inflation, gold prices will increase. This was very evident during the COVID-19 pandemic where the world economy faced an inflation pattern and that pushed gold prices very high. This is only natural at times when there is low confidence in the local currency.
  • Exchange Rate – Since global gold is traded in US dollars, its exchange rate would play a crucial role in the local prices. This means that if the Malaysian Ringgit is strong against the US dollar, gold prices will be lower. If you are going to trade gold, then it makes perfect sense to keep an eye on the US dollar.
  • Supply and demand – When there is economic instability, investors will go about trying to secure their investments. Gold is often seen as a priority during such times. If war is to break out, the local currencies might lose their value but gold’s price will remain.

Buying gold in Malaysia

With all the factors above, how much does it make sense for Malaysians to buy gold? Like any other economies in the world, owning gold is a good investment if you are not looking for any short-term gains and are in for the long run. You can easily buy gold from a jewelry shop as long as it is legitimate. This is the most traditional form of doing so.

Alternatively, you can invest in gold through a bank or any broker. You actually get to own a portion of the gold that the institution owns and in most cases, a certificate is issued to you. Today, digital platforms give you a new option to buy and invest in gold. There are names like HelloGold and Everest Gold which allow you to buy gold in any amount (from as low as RM10) and keep track of your investment using a mobile app and through your smartphones.

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