KUALA LUMPUR (Feb 3): Gold prices are expected to remain volatile in the short term, but underlying global factors continue to support a long-term uptrend, said Malaysia Gold Association president Datuk Seri Louis Ng.

Tighter monetary policy in the US and geopolitical developments, including US-Iran peace discussions and ongoing tensions in Ukraine, are likely to keep the gold market in fluctuation, with gold prices surging in January and then seeing a sharp decline, Ng told reporters on Tuesday.

“The single movement of the interest rate affects the cost of holding gold. So gold as a commodity is very, very sensitive to the interest rate,” Ng said.

While recent sharp drops have impacted speculators and traders in the precious metals market, the mid- to long-term trend remains positive, he said. 

Other structural factors to underpin gold prices include the high global debt-to-gross domestic product ratio, he added.

Ng referred to investment bankers’ projections on gold prices to reach between US$5,800 and US$6,000 per ounce by the end of the year. Current prices hover around US$5,500 per ounce.

In Malaysia, Ng said retail investors are increasingly shifting towards bullion and coins over traditional jewellery, which reflects a growing interest in gold as an investment. 

Though seasonal demand is expected during Chinese New Year, sales may be slightly lower than last year due to the high price per gram, he added.

Ng said buyers may instead opt for smaller weights to stay within their budgets, keeping overall spending relatively stable despite reduced volume.

The rise in prices of silver — used across industries from electric vehicles to solar panels — is due to a persistent supply shortage over the past four years as demand outstripped mining production, Ng said. 

To strengthen Malaysia’s gold ecosystem, Ng highlighted the launch of the Malaysia Gold Industry Principles (MGIP) earlier at the Malaysia Gold Conference 2026. MGIP is a voluntary, industry-led framework designed to improve traceability, responsible practices, and consumer protection across the gold value chain.

The framework, which will be published in the third quarter of 2026, also incorporates international best practices, including the World Gold Council’s Retail Gold Investment Principles, India’s gold industry ecosystem, and UAE standards.

“MGIP will further position Malaysia as an important destination for the global gold industry, combining business, governance, innovation, and culture,” Ng said in his keynote speech.

MGIP covers eight key areas and focuses on responsible sourcing and ethical conduct, transparency and anti-fraud safeguards, product integrity and anti-counterfeit controls, consumer and investor protection, and alignment with global compliance expectations.

Established in 2014, the Malaysian Gold Association has organised the Malaysia Gold Conference annually since 2023 as part of its efforts to promote industry development and international engagement within the precious metals sector.