Gold-related stocks on Bursa Malaysia surged due to rising demand for gold, driven by economic uncertainties in the US. Tomei and Poh Kong saw significant increases in share prices, and forecasts suggest gold could exceed US$3,200 by year-end amid a short squeeze in the market.
On March 14, gold-related counters on Bursa Malaysia experienced a notable surge, prompted by heightened safe-haven demand amid ongoing concerns regarding the US economy. The price of gold reached a record high, leading to significant increases in local stocks, with Tomei Consolidated Bhd rising by 8% to RM1.70 and Poh Kong Holdings Bhd rising nearly 4% to RM1.05. Additionally, Aumas Resources Bhd, which operates a gold mine in Sabah, saw an 8% increase to 81 sen.
Among these movements, TradePlus Shariah Gold Tracker, an exchange-traded fund that mirrors the performance of gold, increased by 3.5%, reaching RM4.15. The surge in gold prices is attributed to ongoing geopolitical instability and a trade war between the United States and its major trading partners, raising fears about the stability of the global economy. Presently, gold is approaching US$3,000 (RM13,337) per ounce.
Experts predict that gold prices will surpass the US$3,000 mark imminently. Hong Kok Wah, the head of trading at Go Capital Growth Sdn Bhd, emphasized that prices could potentially reach US$3,200 by the end of the year. The demand for gold has escalated since the beginning of the Trump presidency, with a noted short squeeze affecting the bullion market as traders attempted to relocate gold from the Bank of England to the US in response to impending tariffs.
The Bank of England stores both commercial gold owned by banks and gold from other countries’ central banks, alongside its own reserves. A report from United Overseas Bank on March 10 suggested that the unpredictability and volatility of the Trump administration’s trade policies would likely intensify the influx of gold bullion into the US, exacerbating the current global short squeeze in gold.
In summary, gold-related stocks on Bursa Malaysia surged in response to increasing demand for gold amidst economic uncertainties surrounding the US. With significant price increases observed for gold and related equities, forecasts indicate potential further gains, with analysts highlighting the ongoing effects of geopolitical tensions and trade policy uncertainties. As a result, both investors and traders are closely monitoring these developments.
Original Source: theedgemalaysia.com
