KUALA LUMPUR: Global gold prices are expected to ease to between US$1,250 and US$1,450 per ounce by year-end due to a combination of external factors, including market volatility, said an industry player.
MKS Precious Metals Sdn Bhd Country Manager, Joseph Ng, said changes in the fiscal, monetary policies and regulatory decision in developed economies, for example, may impinge on the global gold prices.
As of today, the gold price is about US$1,340 per oz.
"The industry is also very much affected by the volatility of gold prices.
"A sharp increase would slow down domestic demand drastically while a drop would result in a massive loss in profit since capital is always in the form of actual gold holdings," he said at the launch of the Gold Futures Contract (FGLD)by Bursa Malaysia Derivatives here today.
He said the launch of the FGLD was not only timely but would also contribute to the gold trade in Malaysia, particularly in managing the volatile gold price risks that industry players had to face everyday.
Ng said based on the Statistics Department figures, Malaysia imported about RM9.12 billion worth of gold bullion in non-monetary form last year.
Gold bullion is used for the fabrication of jewellery as well as investment.
In 2012, Malaysia exported a total of RM7.125 billion worth of finished jewellery, with Dubai being the key destination.
"Singapore still remains a strong destination, second to Dubai for Malaysian jewellery exporters, with a vast majority of the finished jewellery exported being re-exported to other Asian countries, in particular India," he said.
For the first seven months of this year, Malaysia exported some RM4.70 billion worth of finished jewellery, an increase of 6.5 per cent against the same period last year.
During the same period, Malaysia imported RM5.99 billion of gold bullion in non-monetary form, an increase of 3.6 per cent against the same period in 2012.
"The country's gold bullion import is expected to exceed RM12 billion and export of finished gold jewellery would hit RM8 billion given the lower international gold prices since April 22," he said.
MKS Precious Metals is a supplier of Swiss PAMP gold, which is a world leading bullion brand. -- BERNAMA