Gold buying holds steady as price dips trigger renewed investor demand

Consumer demand for gold remains steady despite ongoing price volatility, with recent price pullbacks triggering renewed buying interest and reinforcing the precious metal's role as both a store of value and a retail investment asset.

Habib Jewels Sdn Bhd group executive chairman Meer Habib said buying patterns have evolved significantly in recent years, with a growing segment of consumers, particularly men, shifting towards gold as an investment rather than purely for personal adornment.

"Previously, most purchases were for jewellery. Now, we see more customers buying gold bars as an investment," he told reporters after a dialogue session themed 'Gold in an Uncertain World' today.

Despite this structural change, he said that jewellery demand remains firm, supported by cultural gifting traditions and its dual role as both wearable luxury and an investment asset.

"For customers who felt they missed the earlier rally, the recent decline is seen as an opportunity. We are seeing increased buying interest.

"Jewellery carries a dual appeal. It can be worn and also serves as an investment. That continues to attract customers, especially women," he added.

Meer Habib said that trading activity has also picked up with more customers selling or exchanging older pieces for new designs, supporting overall sales momentum.

On the broader market outlook, he said gold prices have experienced short-term volatility amid geopolitical tensions, particularly in the Middle East, and disruptions to key oil supply routes such as the Strait of Hormuz.

"Overall, gold prices have been on an upward trend. Two years ago, prices rose about 65 per cent, followed by another 27 per cent increase last year," he said.

He added that recent price softness, where gold hovered below RM600 per gramme compared with earlier highs of RM650 to RM700, was largely driven by temporary factors, including countries reallocating reserves to secure energy supplies.

"Normally, during war, gold prices rise because it is seen as a safe haven. This time, some countries had to sell gold to buy oil, which led to a slight pullback," he said.

Meer Habib stressed that such movements are short-term in nature, while the longer-term outlook remains supported by strong fundamentals.

"Many central banks are now increasing their gold reserves instead of holding US dollars, especially after what happened during the Russia-Ukraine sanctions.

"That has further strengthened gold's position as a reserve asset," added Meer Habib.

Source: klsescreener