Recently, I’ve been keeping an eye on the gold market. Today, Malaysia’s price for 999 fine gold has already risen to more than 730 yuan per gram, a figure that would have been unimaginable half a year ago. Last year, gold prices surged by more than 64% for the year, delivering the strongest annual performance since 1979. Now, international spot gold prices have even climbed to a high of 5,600 US dollars per ounce in January.

Over the past two months, the quoted prices at Malaysia’s gold shops have changed especially quickly. I’ve observed that spot gold has held steady around the 5,190 US dollar level, and it has even broken through the recent high of 5,251. The whole market looks as though it’s being supported by risk-averse sentiment and inflation pressure, showing a bullish setup. This week, gold prices have been swinging violently in the range of 5,093 to 5,281 US dollars, and compared with the same period last year, they’ve already risen noticeably.

Interestingly, this round of market movement has led to a polarization among gold shops across Malaysia. On one side, a large number of investors holding physical gold are rushing into stores to liquidate and exit, leaving some gold shops with tight cash flow. On the other side, large funds driven by geopolitical risk-averse sentiment are still positioning themselves at high levels. Because gold prices are changing too fast, many gold shops have switched to a half-day pricing approach, or even posting real-time prices.

The key focus now is to watch the direction of developments in the US–Iran situation. If military mobilization continues to escalate, Malaysia’s gold price today could keep rising; but if there is a diplomatic breakthrough, be careful of pullbacks caused by profit-taking. In addition, the US Non-Farm Employment report has been postponed to early March, which is also crucial for judging when the Federal Reserve might cut rates. Judging by the performance over the past 5 years, gold’s long-term returns have indeed been steady—up 83% over 1 year and up 204% over 5 years—but historical returns ultimately can’t fully represent the future.