KUALA LUMPUR: Gold prices are expected to remain range-bound in the near term after an earlier sharp rally this year gave way to profit-taking and a broader market correction.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the rally earlier this year, when spot gold surged to US$5,595 per ounce in February, has since reversed into a correction phase.
He said expectations of tighter US monetary policy have pushed bond yields higher, weighing on gold prices given the inverse relationship between interest rates and bullion.
“Talks of restrictive US monetary policy have led to higher bond yields, and this has caused gold prices to struggle to rebound,” he said, adding that ongoing geopolitical tensions, including conflict in Iran and disruptions in the Straits of Hormuz, continue to influence bond yields and sentiment.
Afzanizam said these uncertainties remain key drivers that could support a rebound in gold, but for now, prices are likely to stay sideways.
Against this backdrop, market players are also adjusting their expectations on where gold is headed next.
Tomei Consolidated Bhd said gold has retreated from recent highs, with its outlook for RM700 per gram by year-end dependent not only on global bullion prices but also currency movements.
Group managing director Datuk Ng Yih Pyng said gold is likely to trade within a relatively tight range as global markets await clearer direction.
“I think gold prices should trade within a range of plus or minus around US$4,200 to US$4,800.
“To reach RM700 per gram, we also have to look at the ringgit-dollar exchange rate because gold is priced in US dollars,” he said in a press conference after the company’s 21st annual general meeting (AGM) yesterday.
He added that while some projections point to RM700 per gram by year-end, the outcome will depend on both global prices and foreign exchange trends.
As price volatility persists, gold continues to attract interest as a safe-haven asset amid geopolitical and economic uncertainty.
This has translated into stronger demand for investment products, with Tomei reporting rising interest in gold wafers, coins and bars in recent years.
Ng said the trend reflects growing investor participation driven by global uncertainty.
“Because of wars and uncertainties, we are seeing more customers investing in gold,” he said.
He added that investors today are more responsive to price movements due to easier access to real-time information, which has made the market more reactive.
While some investors have taken profits during price spikes, overall demand has remained firm.
“Gold investment is generally a long-term proposition. It is not a case of buying today and selling tomorrow,” he said.
This sustained interest has also opened the door to younger investors, prompting Tomei to expand into digital offerings.
The group’s Gold Now platform, soft-launched ahead of Chinese New Year, is aimed at making gold investment more accessible.
While digital gold currently accounts for less than 1.0 per cent of group sales, Ng said adoption has been encouraging and is growing steadily.
“Younger consumers increasingly see gold as an accessible investment asset. The initial amounts may be small, but they accumulate over time. The important thing is that they start,” he said.
He added that convenience is a key factor driving adoption among younger buyers, making digital gold a growing part of the company’s long-term strategy.
Tomei chairman Raja Tan Sri Aman Raja Haji Ahmad said the initiative reflects a broader shift in how consumers view gold, particularly as an alternative store of value.
He added that concerns over currency volatility and global uncertainty have further strengthened awareness of gold as a savings tool.
Meanwhile, despite growing demand, Tomei is taking a cautious stance on expansion as it navigates a more challenging retail environment.
Ng said the group is reviewing its store network and closing underperforming outlets while remaining selective on new openings.
The company is in discussions with several mall operators but is pacing expansion carefully due to rising costs and softer consumer sentiment.
“As a result, we may open a few outlets and close a few outlets, but on a net basis we are looking at not more than one or two additional outlets,” he said.
He added that this measured approach reflects expectations that business momentum will moderate in the coming quarters following a peak festive period, while higher gold prices continue to affect affordability.
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