Gold has been a reliable asset throughout history and regained importance as both a safe-haven asset and an investment tool.
But why is it so valuable?
With geopolitical tensions, inflation, and the shift toward de-dollarisation, gold is used for hedging, its growing relevance in futures trading, and it’s still considered a reliable store of value, even with the rise of cryptocurrency.
Kelvin Ho, the Head of Derivatives at Affin Hwang Investment Bank, shared his insights on this subject matter with Peter (founder of MrMoneyTV) in a recent video on our channel, titled Malaysian Investment Banker Reveals The Future of GOLD, where they talked about gold’s evolving role in the financial world, especially in today’s economic climate.
The Role of Gold in Today's Geopolitical Landscape
Undoubtedly, gold’s value has surged due to inflation, geopolitical tensions, and de-dollarisation.
Kelvin highlights how central banks are increasingly stocking gold to hedge against the weakening US dollar, demonstrating gold’s continuing role as a reserve for wealth protection.
Gold Beyond The Physical: Futures Trading
Gold has also moved beyond just a physical asset.
Kelvin explains how gold futures trading allows investors to hedge (meaning: a way of protecting oneself against financial loss or other adverse circumstances) against market volatility, offering a way to lock in prices for future transactions, making it an attractive option for those seeking to balance risk in unpredictable markets.
Gold's Predictive Power
In the past, gold prices have risen during times of instability, like wars and pandemics, making it a key indicator of global economic health. Kelvin points out how this trend continues, with gold acting as a safe-haven asset in times of crisis, reflecting investor sentiment toward market risks.
Gold vs. Cryptocurrency: A Fair Comparison?
During this conversation, gold was compared with cryptocurrency, highlighting how gold’s physical, tangible nature makes it more reliable.
It’s mentioned that, unlike crypto, gold doesn’t depend on technology, making it a secure store of value, especially in the face of uncertainties like power outages or regulatory changes.
Gold in Investment Portfolios
Gold still remains a vital hedge for investors looking to protect their portfolios. By incorporating gold into investment strategies, investors can mitigate potential losses during market downturns, making it an essential asset for diversifying risks in today’s volatile economic environment.
Final Thoughts: Gold in Malaysia Matters Now More Than Ever
Given today’s global uncertainties, gold stands out as a trusted, stable asset for investors and governments alike. Whether through central bank reserves or futures trading, its importance in finance continues to grow, offering security in an unpredictable world.
Hungry for more knowledge? Check out this video on our YouTube channel for more in-depth insights into how gold can play a crucial role in your financial strategy.
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