The 15-year-old from Keningau, defeated Negri Sembilan's Inderjith Mooralitharan 32.6 to 32.4 in a closely contested and highly controversial final which saw the Negeri Sembilan nearly stage a walkout.
In the end, Inderjith showed bad sportsmanship by refusing to attend the prize giving ceremony while the Negeri Sembilan team walked out before all the medals were presented to the winners.
Negeri Sembilan tried to force Jamal to admit he lost, reducing the form three student to tears as he thought he had to give up the gold medal.
Sabah manager S. Sunderaju Naidu said: "How can the Negeri Sembilan officials drag my exponent to the umpires and ask him to admit he lost?
If they are not happy with the result, they can always protest.
"They should not have frightened the poor boy. He is in a state of shock.
This should have been a joyous occasion for him but now, we can't even celebrate properly."
Nizam's shock gold medal was one of eight awarded Saturday.
Kedah finished the day with three gold medals and one silver while Negeri Sembilan collected two golds, two silvers and three bronze medals.
Perlis and Penang won one gold medal each.
Meanwhile, Nurshaheera Shazny Mohd Zaini had to wait seven years to win a medal of any colour in the Malaysia Games but the wait was worth the while, when she struck gold in the women's Individual Epee.
Nurshaheera who is in her final Malaysia Games appearance, defeated Johor's Nadzirah Mohd Adzeman 15-9 in the final at the National Sports Council Gymnasium 3 in Bukit Jalil here Saturday.
The 21-year-old Nurshaheera Shazny, who will not be eligible to compete in the next Malaysia Games, said the win was a very meaningful one since she had failed in four previous attempts to win a medal of any colour, let alone the gold.
"The win was totally unexpected since I had not been training because of my studies," said Nurshaheera who has been representing Federal Territories since 2003.
Johor, a powerhouse in fencing events, however, made up for the loss of Nadzirah in the women's Epee, when national fencer Yu Peng Kean took the men's Individual Sabre gold by beating Nurul Ariezzat Nazreen Ismail from Negeri Sembilan, another national fencer, 15-12.
"Midway through the bout, I was alarmed when Nurul Ariezzat came close to leveling the score but drew some inspiration from within to edge my opponent," Yu, 20, winner of the gold in the same event during the 2008 Malaysia Games, told Bernama after his win.
He added that his next major assignment and target would be to win the gold medal during the 2011 SEA Games in Indonesia.
Fencing events will continue Sunday.