KUALA LUMPUR, Dec 12 (Bernama) -- Bursa Malaysia’s key index closed higher today on bargain hunting, in line with positive investor sentiment across regional markets, consolidating at its highest level in more than two months — a level last seen on Oct 2, 2025. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 12.42 points, or 0.76 per cent, to 1,637.81, compared with Thursday’s close of 1,625.39. The benchmark index opened 2.83 points lower at 1,622.56, thereafter edged down to an early low of 1,622.03, before staging an uptrend to an intraday high of 1,640.36 in late trading. Market breadth was positive, with gainers trouncing decliners at 743 versus 387. Another 530 counters were unchanged, 1,108 untraded, and 16 suspended. Turnover increased to 3.09 billion units worth RM2.46 billion from 2.99 billion units worth RM2.35 billion on Thursday. Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the FBM KLCI ended higher on continued...
Gold’s march past US$4,000 per ounce marks a historic milestone in a three-year rally that has upended long-held market assumptions and reshaped the global monetary landscape. The metal’s rise, once dismissed as outdated, now reflects a fundamental reallocation of global capital away from traditional financial assets.
1. The Pandemic Spark That Ignited the Bull Run
Gold’s resurgence began during the COVID-19 pandemic, when it first broke above US$2,000/oz. Momentum accelerated in 2022 after Russia’s invasion of Ukraine and again in 2024 amid renewed geopolitical tension.
2024: Gold gained 27%, driven by central bank purchases and strong Chinese demand.
2025: Former U.S. President Donald Trump’s return to the White House helped propel prices beyond US$3,000/ozin March.
Recent drivers: U.S. government shutdown, a weaker dollar, and renewed safe-haven demand.
Gold has now transformed from a “barbarous relic” into a strategic macro hedge, regaining credibility among investors and central bankers alike.
2. Surpassing the 1980 Inflation-Adjusted Peak
Gold recently exceeded its real 1980 peak, when the metal reached US$850/oz amid inflation and geopolitical turmoil.
Today’s rally carries familiar echoes — fiscal instability, geopolitical risk, and eroding confidence in fiat currencies.
Analysts see this as a structural shift rather than a short-term spike, underscoring how gold is once again functioning as a monetary anchor amid global uncertainty.
3. Central Banks Lead the Charge — Gold Overtakes Treasuries
A major driver of the rally has been record central bank accumulation of gold, as countries seek to diversify away from the U.S. dollar.
Gold holdings have surpassed non-U.S. Treasury holdings within central bank reserves.
The metal now represents the second-largest reserve asset globally, overtaking the euro.
The U.S. has also benefited: the market value of its gold holdings has climbed above US$1 trillion, nearly 90 times the book value listed on federal accounts.
This central bank demand has prompted analysts to revise long-standing valuation models, as traditional correlations with yields and the dollar weaken.
4. China’s Role — Then and Now
China played a decisive role in gold’s ascent through early 2025, as tariffs and trade tensions under the Trump administration spurred domestic investors to seek safe-haven assets.
The Shanghai premium—the spread between Chinese and London gold prices—was a key indicator of demand.
Recently, the premium turned negative, suggesting Chinese buying has cooled while Western investors have taken the lead.
Traders are now watching for market reaction as Chinese exchanges reopen after Golden Week to assess appetite for gold above the US$4,000 level.
5. ETFs Signal Western Investor Momentum
Institutional and retail investors in the West have reignited demand through gold-backed exchange-traded funds (ETFs).
Since mid-2024, ETFs have added over 16 million ounces to their holdings.
Total holdings remain below pandemic-era highs, implying further upside potential if inflows continue.
Analysts say ETF demand reflects a psychological shift among investors toward tangible, system-independent assets.
Analyst Insight
“The move above US$4,000 is not simply a function of rate expectations or a weaker dollar,” said Ole Hansen, Commodities Strategist at Saxo Bank.“It reflects a deeper shift in investor psychology and global capital flows. Sanctions, asset seizures, and fiscal concerns have pushed both institutions and sovereigns toward tangible assets outside the traditional financial system.”
Investment Takeaway
Gold’s rally has evolved beyond macro speculation—it’s now part of a broader realignment of reserve assets and investor behavior.
Drivers to watch:
Central bank diversification trends
China’s post-holiday trading momentum
ETF inflows from Western markets
U.S. fiscal stability and monetary policy signals
While profit-taking risks exist at current levels, analysts say the macro backdrop remains structurally supportive for gold — suggesting the next test may not be if gold stays above US$4,000, but how high it can go from here.
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