KUALA LUMPUR, June 18 (Bernama) -- Bursa Malaysia’s key index finished marginally higher, supported by strong buying interest in consumer-related counters, amid mixed performance across regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 1.40 points, or 0.08 per cent, to 1,711.39 from Tuesday's close of 1,709.99. The key index opened 12.36 points firmer at 1,722.35 and moved between 1,711.31 and 1,722.63 throughout the session. Market breadth was negative, with losers leading gainers 678 to 493, while 549 counters were unchanged, 1,016 untraded and 34 suspended. Turnover increased to 4.50 billion units worth RM3.45 billion from 3.93 billion units worth RM3.45 billion on Tuesday.
Gold prices remain near record highs above US$3,670/oz, supported by expectations of US Federal Reserve rate cuts, mounting geopolitical risks, and sustained central bank demand. Year-to-date, gold has surged more than 38%, marking its strongest annual gain since 2000.
Fed Policy and Labour Market Weakness Fuel Rally
The rally gained momentum after Fed Chair Jerome Powell’s dovish remarks at Jackson Hole, which raised bets for a September rate cut. The weak August non-farm payrolls report — showing just 22,000 jobs added and a jobless rate of 4.3% — reinforced market conviction.
CME data shows traders pricing in a 93.7% probability of a 25bps cut next week, with a small chance of a deeper 50bps move. This has pressured the US dollar and bolstered gold’s appeal.
Safe-Haven Demand Amid Rising Risks
Beyond monetary policy, investors are seeking refuge in gold as geopolitical tensions escalate:
Political turmoil in France following Prime Minister Berlu’s resignation.
Renewed Russia-Ukraine conflict stalemate.
Heightened risks in Venezuela and the Middle East.
Concerns about US fiscal deficits, challenges to dollar credibility, and questions over Fed independence have further lifted gold’s role as a “value anchor” independent of sovereign credit.
ETF Inflows and Central Bank Buying
The World Gold Council reported August inflows of 53 tons (US$5.5 billion) into global gold ETFs, more than double July’s pace. North America led demand with +37.1 tons, while European ETFs added +20.8 tons. Asian ETFs, however, saw net outflows as improving equity sentiment drew funds away.
Central banks have also been net buyers for 14 consecutive quarters, with China, India, and the Czech Republic recently increasing reserves.
Forecasts from Major Banks
UBS: Sees gold at US$3,600 by March 2026, US$3,700 by June; demand growth to hit a 14-year high.
Citibank: Raised its 3-month forecast to US$3,500, with a trading range of US$3,300–US$3,600.
Goldman Sachs: Maintains a US$3,700 year-end target, with upside to US$3,880 if central bank buying accelerates.
Investor Takeaway
Gold remains supported by a powerful trifecta of Fed easing expectations, geopolitical uncertainty, and central bank demand. Near-term volatility is expected around this week’s US PPI and CPI data, but the structural case for gold remains strong.
For investors, exposure can be built through physical bullion, ETFs, or gold miners such as Newmont (NEM.US), Agnico Eagle (AEM.US), Gold Fields (GFI.US), and SSR Mining (SSRM.US).
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