KUALA LUMPUR: Malaysia’s bullion and precious metals industry is heading towards consolidation on the back of rising compliance costs, heavier technology investment and tighter trust requirements.
Malaysia Gold Association president Datuk Seri Louis Ng said smaller players that lack scale or capital may struggle to survive independently due to rising costs and expectations.
“I expect stronger, well-capitalised platforms to acquire or absorb niche operators, especially those with good distribution but without or non-ideal infrastructure.
“The winners will be vertically integrated, combining sourcing, custody, trading, and customer access,” Ng, who is also Public Gold Group founder and executive chairman, told SunBiz.
At the retail level, Ng said investor behaviour has evolved markedly over the past decade.
“Ten years ago, gold buyers were largely preservation-driven – typically older, more conservative investors focused on physical bars and long-term storage.
“Today, the demographic has broadened significantly, with younger, digitally native investors entering the market.
“They are not simply buying gold; they are incorporating it into day-to-day financial planning, portfolio diversification, and even payment solutions. The mindset has shifted from ‘buy and store’ to ‘own and use’ – or ‘use when needed’,” said Ng.
Ng does not see gold competing directly with cryptocurrencies for younger investors, but rather complementing them.
“Crypto represents innovation, decentralisation, and growth potential. Gold represents stability, permanence, and trust accumulated over thousands of years.”
He said younger investors increasingly want both: exposure and protection.
“In practice, many users move between the two depending on market conditions. The real opportunity is building infrastructure that allows seamless movement across asset classes.”
Ng believes the current strength in gold prices reflects a deeper shift in the global monetary system rather than a short-lived rally.
“We are witnessing persistent geopolitical fragmentation, rising sovereign debt, and a slow erosion of confidence in fiat currency stability.”
He said central banks themselves have become net buyers of gold again, signalling a shift in national reserve management.
“It is historically significant. Gold is being re-established not merely as a hedge, but as a core reserve asset. Volatility will remain, but the floor is moving higher,” he said.
However, he said sustained high gold prices can reduce transaction volumes, as some consumers delay purchases or switch to fractional buying.
“Margins can compress if competition intensifies. There’s also inventory and working-capital risk for operators who do not manage hedging properly.”
That being said, elevated prices also attract new interest, especially from investors seeking inflation protection, he said.
“The key is offering flexible formats, fractional ownership, digital gold, savings plans, rather than relying purely on large-bar sales.”
On Malaysia’s regional prospects, Ng said the country is well-positioned to become a retail and fintech hub for precious metals in Asean, supported by its established Shariah-compliant gold infrastructure, a growing digital economy, and a strong cultural affinity for gold savings.
“With the right regulatory clarity and partnerships, Malaysia can position itself as a gateway for Shariah-compliant gold products, digital gold platforms, and cross-border distribution into Asean, or even globally,” Ng said.
The Sun Malaysia
