KUALA LUMPUR: According to the London Bullion Market Association (LBMA), the average price of gold is expected to rise by 6.1% in 2024 to US$2,059 (RM9,806) per ounce compared to the average price of US$1,940.54 (RM9,241.82) in 2023. This projected increase is attributed to three key factors: US monetary policy, central bank activity, and geopolitical risks.
Jeremy East, a senior adviser at LBMA, emphasized that central banks have been a significant driver of gold prices, with notable net buying seen in recent years contributing to global gold demand. The World Gold Council Survey in May 2023 revealed that a quarter of central banks planned to increase their reserves in the coming years.
Additionally, LBMA predicts that China will lead the way in gold purchases, with the People’s Bank of China being a net buyer for 14 consecutive months as of the end of 2023. Other active buyers include Poland and Singapore, with significant purchases recorded up to October.
In Malaysia, the Malaysian Gold Association (MGA) President Datuk Wira Louis Ng anticipates the price of gold to reach US$2,200 (RM10,474) per ounce in 2024, citing increasing demand from central banks, retailers, and companies amid economic uncertainty and geopolitical tensions. Ng has also proposed an increase in the threshold value for the imposition of Luxury Goods Tax on gold purchases to RM50,000 to support the industry.
The MGA, established in 2014, has been instrumental in advancing the local precious metals industry through various initiatives, including active involvement in national policy-making and maintaining regional gold standards. The annual Gold Conference brings together global leaders in the precious metals industry to discuss market trends and opportunities for international trade.
Insight:
The projected increase in the price of gold in 2024 is influenced by a combination of economic factors, including central bank activity, geopolitical risks, and global demand. The role of central banks as key buyers of gold is expected to continue driving prices higher, with China standing out as a major player in the market. The Malaysian Gold Association’s proposal to revise the Luxury Goods Tax threshold reflects efforts to support the industry amidst changing market conditions. The Gold Conference serves as a platform for industry leaders to exchange insights and discuss strategies for navigating the evolving landscape of the precious metals market.
