KUALA LUMPUR, Feb 3 — Gold and silver prices are expected to remain bullish over the mid- to long-term despite short-term volatility triggered by global macroeconomic and geopolitical developments, said Malaysia Gold Association (MGA) president Datuk Seri Louis Ng.
He said recent price swings were driven largely by market overreaction to negative news, including expectations of tighter United States monetary policy and geopolitical tensions.
However, he said the underlying fundamentals supporting precious metals remained intact.
“I believe the market reacted too drastically. If we look at the fundamentals, the gold and silver demand is still very high, and the underlying reason for the gold price to move higher is still there,” he said during the press conference at the Malaysia Gold Conference here today.
Ng said one of the key drivers of the gold bull run over the past few weeks was the global debt situation.
Commenting on price projections, Ng was cautious about making specific forecasts, although investment banks have projected gold prices at between US$5,800 per ounce and US$6,000 per ounce (US$1=RM3.95).
On silver, he said the price rise has been supported by a persistent supply-demand imbalance, with the metal recording deficits for the past four years due to strong industrial demand.
“Silver mine supply is not enough for the demand from industries such as electric vehicles, solar panels, graphic processing units and central processing units,” he said.
Ng also said easing geopolitical tensions, including recent developments involving the US and Iran as well as a temporary truce between Ukraine and Russia, had contributed to the recent pullback in prices.
Regarding domestic demand, Ng said the high gold prices, with some retail prices reaching about RM800 per gram, are expected to moderate buying activity, particularly in volume.
“With the high gold price now, the demand for gold will be slowing down. People may buy smaller grams with the same budget,” he said.
He said there is a shift in retail buying patterns in Malaysia, with investment products such as bullion and coins accounting for about 60 per cent of purchases, compared with around 40 per cent for jewellery, driven by higher interest in gold investment.
