World Gold Prices Rise To Touch The Highest Level In The Last Month

JAKARTA, KOMPAS.com – Price it’s not The world reached its highest level in the past month at the close of trading Wednesday (Thursday morning WIB). This was triggered by soaring inflation in the United States (US) thereby increasing the attractiveness of gold as an inflation hedge asset.

Collect CNBCThursday (14/4/2022), gold price The world’s spot market rose 0.6 percent to 1,978.21 US dollars per troy ounce. This closing level was the highest since March 14, when gold was at the level of 1,981.30 US dollars per troy ounce.

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Meanwhile, the New York Exchange Comex gold futures price rose 0.4 percent to 1,984.70 US dollars per troy ounce.

“It’s not seems to be ignoring a hike in the US benchmark interest rate and focusing heavily on high inflation,” said Edward Meir, analyst at ED&F Man Capital Markets.

US monthly consumer price index data released Tuesday showed a spike in inflation in March. This also strengthens the potential for another 50 basis point hike in the benchmark interest rate by the US Central Bank in May to tackle high inflation.

Gold is considered a hedge against inflation and geopolitical risks. However, an increase in interest rates does not benefit gold, because it increases the chance of losing holding gold that does not provide yields.

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The increase in US interest rates by 25 bps in March had made US government bond yields soar, as was the value of the US dollar, which even touched its highest level in the last two years.

However, the ongoing heating up of the Russia-Ukraine geopolitical conditions and high US inflation have made the gold price trend re-crumple, because investors are again interested in securing their funds in the safe haven of gold.

As is known, on Tuesday, Russian President Vladimir Putin said Ukraine thwarted peace talks, so it would continue its ‘special military operation’ against its neighboring country.

“The war is continuing and with no clear solution and proof that it’s a long-term problem (and supporting rising gold prices),” said Carlo Alberto De Casa, External Markets Analyst at Kinesis.

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