Another key player in Asia following India! It is reported that Malaysia will impose a 10% import tariff on some gold bars to alleviate the pressure of currency depreciation.

According to sources, Malaysia has imposed a 10% tariff on some gold bar imports. Traders and dealers have stated that since early May, some imported goods have been subject to a 10% tariff. Some have mentioned that due to the additional costs - without a corresponding increase in local gold prices - importing has become unprofitable, leading to some goods being detained by customs or rerouted elsewhere. Bank Muamalat Malaysia Bhd., a local Islamic bank that offers gold investment products, stated in a recent announcement that whenever a 10% import tax is imposed on gold bars, this cost will be passed on to customers. A spokesperson for the Royal Malaysian Customs Department mentioned that the Ministry of Finance will engage in consultations with the industry regarding the importation of "gold products." According to the latest information disclosed, the Malaysian Ministry of Finance has imposed a 10% import duty on gold bars certified with 99.99% purity that meet LBMA standards. This tax specifically targets LBMA gold bars - the international wholesale standard gold bars used by central banks, institutional investors, and major traders, which are the most common products in Malaysian bank gold accounts. Non-LBMA standard gold savings products are currently unaffected, creating a dual-track market structure with a "taxation for high-end, exemption for low-end" system. For investors holding or purchasing LBMA standard gold bars through Malaysian banks, the cost impact is significant: based on a gold price of approximately 450,000 Malaysian ringgit per kilogram, each gold bar will incur an additional tax cost of around 45,000 Malaysian ringgit. Earlier this year, gold prices reached record highs, sparking interest from investors in regions including Asia. In Malaysia, some local banks have introduced gold investment products in the past year, and the logistics company Loomis AB has opened a gold vault near the capital to meet the growing demand. Following India's significant increase in import tariffs on gold and silver from 6% to 15% on May 13, Malaysia - known for its long-standing "zero gold tax" policy in Southeast Asia - has quietly changed its rules. The two largest gold-consuming economies in Asia have taken action at almost the same time, with similar reasoning. This is not a coincidence. India is the world's second-largest gold consumer, with a gold import bill reaching $58.9 billion by the end of 2025, posing continuous pressure on the current account deficit. While Malaysia's absolute size is smaller - with non-monetary gold imports of around 9.7 billion ringgit (about $2.5 billion) in the first four months of this year - its growth momentum has also alerted policymakers. A deeper driving force comes from the currency side. The Malaysian ringgit has been under pressure, and international gold prices have risen by about 70% in the past 18 months - from around $2,663 per ounce at the end of 2024 to over $4,500 per ounce in May 2026. The combined effect means that the price of gold priced in ringgit is climbing at a staggering rate, stimulating stronger demand for physical gold purchases, while a large amount of gold imports further deplete foreign exchange reserves and intensify currency devaluation pressure. This is a typical "self-reinforcing" vicious cycle. AInvest points out in their analysis: "This is not about gold itself - it's about what happens when retail investors in emerging markets see their national currency as a 'risky asset' and flock to the only asset the government cannot print. Both governments are trying to curb capital flight by imposing taxes."