Gold Prices Tied to Interest Rate Hike Cycle: MGA

The Malaysia Gold Association (MGA) is concerned about the ongoing interest rate hike cycle in major economies and its potential impact on gold prices. The association's president, Datuk Seri Louis Ng, said further interest rate increases could dampen gold prices.

The US Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75 per cent to 4.00 per cent yesterday. Ng expects another two or three rate hikes before interest rates settle down, which could lead to a downcycle in gold prices.

Ng noted that geopolitical tensions have already been factored into current gold prices and that the conflict between the US and Iran continues to affect the situation in Ukraine and Russia. He predicted that gold will trade in the range of $4,000 to $5,000 per troy ounce for the next two years.