Habib Jewels sees sustained demand for physical gold, cautious on digital segment

Jewellery retailer Habib Jewels is seeing sustained demand for physical gold despite elevated prices and global uncertainties, even as it adopts a cautious stance towards the growing popularity of digital gold investments.

Group executive chairman and CEO Datuk Seri Meer Habib said demand has remained resilient in recent weeks, supported by festive spending and increasing interest in gold as a store of value.

“The weekend before Raya, we had probably the busiest ever crowd in all our shops throughout the country. Demand was super strong, with some items even sold out,” he said, adding that the Hari Raya Aidilfitri season continues to drive jewellery purchases.

While jewellery remains the core business, Meer noted a clear shift in consumer behaviour, with investment-driven purchases rising significantly. “The buying of investment gold has improved very significantly. It has gone up tremendously, although jewellery demand is still much higher overall.”

He added that this trend reflects growing consumer awareness of gold’s role as a hedge against economic uncertainty. Increasingly, buyers are purchasing gold not only for adornment but also as a form of wealth preservation, particularly amid volatile financial markets.

Meer said the preference for physical gold remains strong, even as digital gold platforms gain traction. Many consumers, he noted, continue to value the security and tangibility of holding physical assets, especially during periods of heightened uncertainty.

“A lot of digital gold products should be backed by physical gold but, in some cases, they are not. That can be risky,” he said.

He pointed out that discrepancies between digital and physical markets have become more evident, particularly when demand for physical commodities outpaces supply. “There are situations where physical demand is extremely high, and sometimes supply is tight, even though digital trading suggests otherwise.”

As a result, Habib is taking a measured approach towards digital expansion, focusing on ensuring transparency and proper asset backing.

The group is studying a hybrid model that would combine digital convenience with the assurance of physical gold reserves.

“If we were to do it, we would ensure it is properly backed and that customers can choose between cash or physical gold,” Meer said.

Beyond investment trends, the group continues to emphasise its physical retail presence, underscoring the importance of customer experience in high-value purchases.

Meer said many customers still prefer to visit stores, particularly when buying jewellery for special occasions. “When customers want to buy something special, they still want the experience. We are more like consultants than salespeople, guiding customers to make informed decisions.”

Habib’s retail strategy reflects this approach, with continued investment in brick-and-mortar outlets alongside its digital channels.

The company recently expanded into new locations and is set to open its largest outlet to date within the next month.

“We want to ensure that when we open a store, we provide the full experience. Our biggest ever store will be opening very soon,” Meer said, adding that expansion decisions are driven by customer demand and feedback.

On pricing, he said the group strives to maintain reasonable margins despite fluctuations in gold prices, in line with its long-standing business principles.

He noted that maintaining customer trust is key to sustaining long-term demand.

Looking ahead, Meer expects gold prices to trend higher over the next six months, although short-term movements are likely to remain volatile. “By the end of the year, we expect gold prices to go up. But in the near term, it will be up and down because there are too many uncertainties.”

He added that central bank activity continues to underpin the gold market, with many countries increasing their gold reserves as part of a broader shift away from reliance on the US dollar.

“There has been a move towards dedollarisation. Countries are buying more gold as reserves instead of holding US dollars, and that has supported prices,” he said.

However, Meer cautioned that external factors such as oil prices could influence this trend, as higher energy costs may affect how governments allocate their financial resources.

Against this backdrop, ongoing geopolitical tensions, particularly in the Middle East, continue to shape global market sentiment.

Meer said while the conflict has contributed to fluctuations in gold and currency markets, Malaysian consumers remain relatively resilient. “what’s happening globally, there is always uncertainty. But Malaysians are still in a relatively better position, and gold remains reasonably priced for consumers.”

He added that the interplay between rising oil prices, currency movements, and interest rate expectations has created a complex environment for gold, with short-term consolidation masking underlying strength.

“Fundamentally, demand for gold is still very strong. During uncertain times, people will always turn to gold as a safe haven,” Meer said.

 

Source: The Sun