Gold drops on vaccine news

 

Golden investment: Anisah Ahmad (left, standing) and her friend Nurul Habzan Abdul Halim looking at bracelets in a jewellery shop in Jalan Tuanku Abdul Rahman, Kuala Lumpur. — AZLINA ABDULLAH/The Star

KUALA LUMPUR: The announcement on the discovery of the vaccine for Covid-19, which has brought relief to everyone in the world, including in Malaysia, is said to be a major factor for the sharp drop in gold price lately.

Gold investment consultant Syukor Hashim said gold price went up by 37% from early January until August where it used to exceed RM300 a gram.

“It has dropped to RM256 per gram.

“It went up due to the threat of Covid-19 which affected the world economy. People were afraid to spend and investors were choosing gold as a safe asset.

“But when news on the discovery of the vaccine spread, it has to some extent, reduced the risk of the Covid-19 threat with economists and investors believing the world economy will recover.

“In this situation, gold is seen to have lost its attraction as a safe asset, ” he said.

The media had reported that people have been flocking to jewellery shops to take the opportunity to buy the precious metal as investment.

Asked when the gold price will go up again, Syukor said he could not predict it as it was influenced by current news.

“For example, the power transfer in the United States between Joe Biden and Donald Trump. If there is a ‘drama’ between them, the price of gold can go up again, likewise on the news on Iran claiming that its nuclear scientist was killed by Israel.

“In other words, the rise in the price of gold is not only affected by Covid-19, but also other factors. For this year, it is the pandemic, ” he said.

Meanwhile, a survey at several jewellery shops here yesterday found fewer customers than during the weekend.

A gold trader at the Keramat Urban Transformation Centre, Munirah Aqilah Mohd Zahari said that last weekend was a very busy time for her as the number of customers at the shop doubled, compared to most days.

“Generally, the public would take advantage of the low gold price to exchange their old jewellery while some order new ones as investment or accessories, ” she said.

Another trader, Nik Ahmad Tarmizi Nik Hassan said many buyers bought jewellery using their savings, even though the price of gold was higher at the beginning of the implementation of the moratorium.

“Many customers came using the money for their car or house loan to buy jewellery as a long-term investment, ” he said. — Bernama