Kuala lumpur: Precious metals such as gold and silver continue to play an important role as an investment strategy for hedging against uncertain economic situations, even though the inverse correlation between currencies and gold movements has changed, especially over the past three years. According to BERNAMA News Agency, the chairman of the Shariah Advisory Council of the Securities Commission Malaysia, Prof Datuk Dr Aznan Hasan, highlighted that gold holdings remain necessary and play a role in stabilising situations such as rapid currency fluctuation or very high inflation. He noted that while currency inflation causes a currency to lose value, gold tends to retain its value or even appreciate, thereby offering a protective measure for financial stability. Aznan explained that the previously clear inverse relationship between gold and currency is no longer absolute. Over the past two to three years, this correlation has shown signs of imbalance, where the rise in currency value does not necessarily caus e gold prices to drop completely, and vice versa. Despite these changes, investors continue to gravitate towards gold when currencies weaken. Further elaborating on the role of precious metals, Aznan stated that gold is not categorised as a high-quality liquid asset (HQLA) under the Basel III Standard, meaning it does not significantly contribute to managing the liquidity coverage ratio (LCR) or the net stable funding ratio (NSFR) for banks. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid pointed out that although gold is no longer a cornerstone of the global financial system after the fall of the Bretton Woods system in 1971, global central banks have been increasing their gold holdings. Data from the World Gold Council shows that central banks accumulated 27 tonnes of gold as of February this year, aligning with the previous year's monthly average. Dr Mohd Afzanizam also discussed the impact of global financial shifts, particularly the declining dominance of the US dollar in cen tral bank reserves, which fell to 56.8 per cent by the fourth quarter of 2025. This trend corresponds with the increased preference for gold as a stable and valuable asset class. He further explained how geopolitical dynamics and technological advancements, like blockchain, could integrate gold and other valuable commodities into financial and payment systems. The Ar-Rahnu Islamic financing industry serves as an example, providing vital access to financing for micro, small, and medium enterprises (MSMEs). Dr Mohd Afzanizam emphasized the necessity for a comprehensive policy to support the mineral industry's ecosystem, ensuring a sufficient supply of gold to meet growing demand and secure the industry's future.