Surge in Bursa Malaysia Gold Stocks Amidst U.S. Economic Concerns
Gold-related stocks on Bursa Malaysia surged due to increasing demand for gold, driven by economic uncertainties in the U.S. Index gains included Tomei Consolidated Bhd and Poh Kong Holdings Bhd, with gold prices projected to approach US$3,000 per ounce amid geopolitical tensions.
On March 14, gold-related equities on Bursa Malaysia exhibited notable increases as investor interest in gold surged, influenced by rising apprehensions surrounding the U.S. economy. Stocks such as Tomei Consolidated Bhd rose by 8% to RM1.70, while Poh Kong Holdings Bhd increased nearly 4% to RM1.05. Aumas Resources Bhd, which operates a gold mine in Sabah, also appreciated by 8% to 81 sen.
Additionally, the TradePlus Shariah Gold Tracker, an exchange-traded fund that mirrors gold’s performance, was reported at a 3.5% increase, reaching RM4.15. This escalation in gold prices is attributed to ongoing geopolitical instability and the trade conflict between the U.S. and its major trading partners that raises fears over the global economic landscape.
As a result, gold prices are projected to approach US$3,000 per ounce imminently, according to Hong Kok Wah, the head of trading at Go Capital Growth Sdn Bhd. He conveyed this projection along with the possibility of prices potentially rising to US$3,200 by the end of the year.
The demand for gold has intensified since the beginning of the Trump administration, leading to reports of a short squeeze in the market. Notably, traders have sought to transfer gold from the Bank of England to the U.S. in anticipation of tariffs imposed by the Trump administration.
The Bank of England’s vaults store commercial gold owned by various banks and foreign central banks, supplementing its own reserves. A March 10 report from United Overseas Bank emphasized that the volatile nature of U.S. trade policy is likely to further facilitate the flow of gold bullion into the U.S., thereby exacerbating the global short squeeze in the gold market.
In summary, the rise in gold-related stocks on Bursa Malaysia reflects heightened investor demand for gold amid economic uncertainties in the U.S. Predictions indicate that gold prices may reach US$3,000 per ounce shortly, with potential for even higher valuations by year-end. The ongoing geopolitical tensions and trade conflicts significantly influence these market dynamics, underscoring the critical position of gold as a safe haven during volatile times.
Original Source: theedgemalaysia.com
