Jakarta, CNBC Indonesia – The upward trend in world gold prices continues while bitcoin prices are still lying and struggling to rise. The fall in the price of crypto assets is one of the triggers for the increase in the price of precious metals to near the highest level in the last 5 months.
At 13:33 WIB, gold prices shot up 0.47% to Rp 1,915.31/troy ounce on the spot market, Refinitiv data reports. This level is the highest since January 8.
Throughout the month of May, the price of gold was able to rise 7.8%, while the price of bitcoin fell by more than 35%.
Analysts say the collapse of bitcoin and other cryptocurrencies has made gold prices climb again. In fact, extreme predictions have re-emerged, gold is said to be above US$ 5,000/troy ounce by Scott Minerd as Guggenheim’s CIO. In addition to inflation, he sees the collapse of cryptocurrencies making gold attractive again.
“When money leaves crypto and people are still looking for assets to hedge against inflation, gold and silver will make good investments.” Minerd said, as reported by Kitco.
In addition, the increase in gold prices was also triggered by the decline in the US dollar. The US dollar index slumped 0.2% this afternoon to 89.848, and in the future there is still a risk of falling further as market participants are selling more and more.
Data from the Commodity Futures Trading Commission (CFTC) released last Friday showed short positions (short) the US dollar is at its highest level since late February.
The net short value of the US dollar in the week ending May 25 was reported at US$ 27.89 billion, a sharp increase from the US$ 15.07 billion net short position in the previous week.
The increase in the net short position indicates that more market participants are “throwing” the US dollar because it is predicted that its value will weaken.
“Gold will slowly rise. If inflation expectations are higher, then gold will become a run for market participants. One thing we need to pay attention to is the US dollar. If the US dollar index returns to levels of 93 to 94, it will be difficult for gold to continue strengthening. Meanwhile, if the US dollar index is around 90, it will be good for gold,” said John Meyer, co-director at Walsh Trading. Kitco, Friday (28/5/2021).
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
– .
