This article first appeared in The Edge Malaysia Weekly on March 9, 2026 - March 15, 2026

GOLD has once again grabbed the spotlight following the military strikes by the US and Israel on Iran over the weekend of Feb 28, which have resulted in the killing of Supreme Leader Ayatollah Ali Khamenei.

What followed was a series of retaliatory strikes by Iran, which saw hundreds of missiles and drones being launched at neighbouring countries — targeting US military bases but also striking civilian and energy infrastructure.

Not surprisingly, the yellow metal — which saw a correction at the end of January after hitting a high of US$5,417.21 per ounce — saw a knee-jerk reaction as the geopolitical upheaval provided another kick-start.

Gold prices jumped 2% to more than US$5,400/oz as buyers sought shelter in safe-haven assets to hedge the impact of the crisis.

Analysts believe that gold will continue to shine as long as geopolitical risks continue to bring about uncertainty, as seen in recent years.

BMI, a unit of Fitch Solutions, described the current crisis in Iran as the biggest geopolitical crisis for the Middle East since the 1979 Islamic Revolution. In a March 2 report, it pointed out that it carries significant implications for prices of key metals and bulks. “While the US dollar has also strengthened, we think gold can still trade higher this week, potentially reclaiming US$5,600/oz and posting a fresh all-time high.”

The research unit outlined two reasons for its projection, the primary reason being the lack of certainty on the duration of the current geopolitical risk premium in oil prices.

“Without a clear consensus on how long the conflict and the associated premium will last, markets will shelter in safe-haven assets like gold. In the event of our Country Risk team’s core scenario of a two-to-three week conflict, this could push gold towards US$5,850/oz and potentially as high as US$6,500/oz,” it predicted.

The second reason is the physical disruption to the bullion market if flights are unable to transit through Dubai — one of the world’s largest gold refiners. BMI said it is unlikely to materially affect the physical market, which is highly liquid and well stocked, but the premise of disruption will bolster bullish sentiment.

Based on consensus available on Bloomberg, the median forecast for gold prices for the first quarter of 2026 is US$4,600/oz, with the highest being UBS Group’s US$6,200/oz and the lowest being Dubai government-owned financial institutions Emirates NBD’s US$4,100/oz.

In an insight released by UBS Group just a week before the conflict in the Middle East, it said that it expects demand for gold to pick up further, supported by rising investment activity and robust central bank purchases even as data from the World Gold Council showed that gold demand exceeded 5,000 tonnes for the first time in 2025.

UBS maintained that higher incomes in Asia should underpin longer-term structural demand for gold supply while supply stagnates. Moreover, it pointed out that there are about 80 mines which will exhaust their current production plans by 2028.

“So, we maintain our ‘attractive’ view on gold, and view the yellow metal as an effective portfolio diversifier that can help hedge against a range of market and economic risks. Investors with an affinity for gold could consider an up to mid-single-digit allocation in a diversified portfolio,” it added.

Notably, gold has been climbing at a rapid pace ever since the invasion of Ukraine by Russia in 2022. Central banks have upped their gold reserves in response to sanctions risk, geopolitical fragmentation and a desire to reduce reliance on the US dollar, ING Research said in a note dated Feb 26.

“As long as geopolitical fragmentation persists, a meaningful reversal in central bank gold demand looks unlikely. The structural floor continues to underpin the market at elevated price levels,” it added.

While ING Research said there is more room for the yellow metal to rise, it cautioned that the momentum may slow. “At record price levels, physical demand is becoming more price sensitive and periods of consolidation — or short-term correction — should be expected,” it added.

Nevertheless, it also said the structural pillars of the gold rally, being the central bank diversification, geopolitical fragmentation, potential policy easing and renewed ETF interest, remain intact.

With gold prices soaring over the last few years, local listed jewellers such as Poh Kong Holdings Bhd (KL:POHKONG) and Tomei Consolidated Bhd (KL:TOMEI) have seen both revenue and net profit creeping up as well.

Tomei Consolidated concluded its financial year ended Dec 31, 2025 (FY2025) with the highest revenue over the last five years at RM1.31 billion and net profit of RM106.82 million. It was a 25% increase in revenue and a 50% increase in net profit from the year earlier. Net profit margins also improved to 8.13% from 5.68%.

Meanwhile, Poh Kong, which has a financial year ending July, reported a 4% increase in net profit in FY2025 to RM121.1 million from RM116.92 million in FY2024. Revenue was higher by 3% at RM1.69 billion in FY2025 compared with RM1.64 billion in FY2024.

For the first quarter ended Oct 31, 2025 (1QFY2026), Poh Kong’s net profit totalled RM39.61 million while revenue stood at RM439.94 million. This is compared to 1QFY2025’s net profit of RM21.34 million against revenue of RM329.28 million.

While some are of the opinion that times are good for the jewellery industry, the listed jewellers beg to differ. “As we all know gold — be it jewellery or as investment — is not an essential product. You can opt not to buy. Higher prices no doubt will affect buying sentiment, so it’s not as simple as ‘higher prices are good for retailers’,” says Poh Kong director Ermin Siow.

Nevertheless, there seems to be a significant shift in how consumers are purchasing gold today.

Tomei Consolidated group managing director Datuk Ng Yih Pyng says in the last two years, there has been a big shift towards the investment element for gold, with consumers buying gold coins, wafers or bars, instead of jewellery.

“From a retail perspective, the turnover is holding up. But what we are seeing is a decline in jewellery sales that is compensated by an increase in investment products,” he notes, adding that more of the younger generation are showing an interest in gold investment, a trend he expects to continue in the future.

Siow adds that when gold prices were lower, sales of gold jewellery used to be at 80% or more of total sales, whereas gold investment products usually sat at 20% or less.

While he acknowledges that jewellery sales have maintained at impressive volumes, he did not share the ratio between the two products.

Given the soaring prices, jewellers have had to adapt to the landscape by changing the way gold jewellery is designed. Ng says it is now designed to be lighter in weight, which is possible with technology, to make purchases more palatable for consumers.

Besides lighter jewellery, Ng shares that the higher price of gold now has also made it more costly for jewellers to expand their outlets because of the higher investment in stock required.

That said, with Hari Raya coming on the heels of the Chinese New Year, jewellers think that sales can be maintained for now, and that the actual impact will be seen in the second quarter onwards, especially from May to July.

However, the question that lingers is whether consumers would continue to purchase the precious metal if prices continued to soar to eye-watering levels.

“I used to get worried every time retail gold prices breached new highs. From RM200 per gram to RM300 per gram, and so on. It has continued to climb until RM700 per gram today. Will there come a time when consumers just give up buying gold?

“In hindsight, while sales have been affected, consumers still continue to buy, maybe less or perhaps opting for lighter weights. Gold, for some reason, has entrenched itself with the masses and irrespective of prices, it still sells — either as jewellery or investment products,” says Siow. 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.