Analysis of Gold Price Fluctuations in Malaysia During COVID-19

This report examines the impact of COVID-19 on gold prices in Malaysia. It explores the influence of several key economic factors, including inflation rates, interest rates, exchange rates, and crude oil prices. The analysis indicates that the pandemic has significantly affected the gold market through disrupted trade relations, leading to fluctuations in exchange rates, and impacting the purchasing power of consumers. High oil prices, which often correlate with gold prices, are also considered. The report highlights how rising inflation and interest rates influence investment choices, with higher rates potentially diverting investments from gold to fixed-income options. The report concludes by emphasizing the volatile nature of the gold market during this period, due to the economic uncertainty created by the pandemic and the resulting shifts in money flow within the economy. References to relevant sources are included in the report.

FACTORS AFFECTING GOLD PRICES BECAUSE OF
COVID 19 IN MALAYSIA
There are many factors which have an impact over the
prices of gold in Malaysia and these needs to be
evaluated. These factors are as follows-
 Inflation rates
 Interest rates
 Exchange rates
 Crude oil prices
Inflation rates
 This affects the prices of gold as the inflation
rises and at the same time the value of currency
has decreased.
 Thus, because of this the people are not in
position of purchasing the gold and hold it for
longer period of time.
 Thus, when the inflation is high then at that time
the people are not able to manage the purchase
of gold.
Interest rates
 There is negative relation among the interest rate
and gold and when the interest rates increase
then at that time the economy becomes strong.
 Further when interest rate increases then at that
time people uses gold as hedge fund against
inflation and try to invest in fixed income
investment and not in gold.
Exchange rates
 Due to the current COVID 19 the trade relation
among the countries has been affected to a great
extent and because of this the gold business has been
affected to a great extent.
 Thus, this fluctuation in the exchange rates has
resulted in the decrease in business of gold.
Crude oil
 This also has direct and indirect cost impact over
gold and its purchase.
 The higher the oil price will be then it will result in
high gold price as well.
 The major reason is that both the gold and oil price
are related to one another.
 Future of gold is a very fluctuating and this has a
great impact over the demand and supply of the gold
as currently there is less flow of money in the
economy.
 The reason underlying this is because of COVID 19
the flow of money with people and in economy has
misbalanced.
REFERENCES
Online
Economic forces on gold price in Malaysia. 2018.
[Online]. Available through: < https://journale-
academiauitmt.uitm.edu.my/v2/images/vol7issu
e2/PID188-
ECONOMICFORCESONGOLDPRICEINMA