By Nurunnasihah Ahmad Rashid
KUALA LUMPUR, Dec 2 (Bernama) -- When Bernama first reported in March that gold had caught fire and could potentially climb towards US$5,000 per troy ounce by year-end, the precious metal was already rewriting the record books.
Prices had surged past the US$3,000 mark, extending a rally fuelled by global uncertainty, rate cuts and relentless buying from central banks.
But as 2025 draws to a close, the journey to US$5,000 has proven slower than many speculators anticipated.
Gold eventually crossed US$4,000 in October — but only after a seven-month climb from March’s breakthrough. The pace of appreciation has led economists to conclude that US$5,000 by end-2025 was too optimistic, unless an extraordinary shift in monetary policy or geopolitical risk occurs.
IPPFA Sdn Bhd director and country economist Mohd Sedek Jantan said this year’s price movements underline a simple reality: while the gold rally remains strong, subsequent psychological barriers require increasingly stronger catalysts.
US$5,000 Needs A Bigger Push — And It Has Not Come (yet)
Mohd Sedek said the time taken for gold to move from US$3,000 to US$4,000 illustrates how each new threshold becomes more difficult to break, especially when market conditions normalise between major risk episodes.
He said the jump from US$3,000 per troy ounce in March to US$4,000 per troy ounce in October represented a steep climb over seven months, signalling that the next leg — to US$5,000 — would require sharper triggers, such as significantly faster and deeper interest rate cuts, a major geopolitical crisis, or a sudden expansion in central bank buying.
“I do not see a shortage next year, but demand will keep rising. Prices can surpass US$5,000 — but the timing depends heavily on how aggressively the US Federal Reserve (Fed) cuts rates,” Mohd Sedek told Bernama.
He believes US$5,000 is still achievable, but more realistically in early 2026, rather than by end-2025.
“With major economies already reducing rates to stabilise their currencies, global monetary easing will remain the key driver of the next gold surge.
“If the Fed cuts rates below three per cent, gold could shoot to US$6,000,” he said, describing the scenario as aggressive but plausible.
Mohd Sedek said US$5,000 could emerge in the first half of 2026, with US$6,000 possible if central banks accelerate their defensive gold accumulation while investors hedge against inflation and geopolitical volatility.
Central Banks Driving Demand, But No Shortage Expected
Central banks now account for about 21 per cent of global gold demand, compared to just 1.8 per cent in 2010. Despite this, Mohd Sedek does not believe the world is heading for a shortage.
He said mining companies — after years of weak profitability — are better positioned to raise output, although supply growth will still trail global demand. “Demand is simply stronger than before. That will keep pushing prices higher,” he said.
Mohd Sedek said he does not expect Bank Negara Malaysia (BNM) to expand its gold holdings, given that Malaysia’s reserves remain anchored in US dollars and the current 2.75 per cent overnight policy rate does not justify additional accumulation.
“There is no need for our central bank to increase gold demand at this time,” he said.
Malaysian Investors: Gold Still A Long-term Hedge
Mohd Sedek reminded Malaysian investors that gold should not be viewed as a short-term profit instrument.
Typical returns are in the one-to two-per cent range, he said, with favourable conditions lifting gains to only three to four per cent.
“Do not hold gold just to make money. Hold it for at least five to six years — the purpose is to hedge uncertainty,” he said.
He said Malaysia remains a jewellery-led gold market with consumers strongly preferring 916 and 999 jewellery, while bullion and Kijang Emas play a minor role.
“Jewellers such as Poh Kong and Habib continue to record stronger sales, driven by consumer behaviour that typically intensifies when stock markets weaken, when fixed deposit rates are unattractive or when households seek a stable store of value,” he said.
Taken together, the events of 2025 show that gold’s momentum remains intact despite a slower climb. US$5,000 may not materialise this year, but 2026 could open a new chapter in the market’s price cycle. For now, the ascent may be gradual — yet the direction is unmistakably higher.
-- BERNAMA
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