Jakarta, CNBC Indonesia – World gold prices have decreased in the past week. The same thing was experienced by the price of precious metals produced by PT Aneka Tambang Tbk aka Antam’s gold.
Gold prices slipped 0.24% in the week. The decline in world gold prices is in response to the US central bank’s plan, The Fed, which will carry out tapering off this year.
At the meeting of the Fed’s Policy-Making Committee (FOMC) interest rates were indeed held in the range of 0-0.25%. However, the Fed’s signal to reduce bond purchases is getting stronger.
It’s just that the tapering is likely to be completed by the end of next year. Market participants estimate that the tapering will be announced in November and will take effect in December this year.
Another thing that is quite surprising from this month’s FOMC meeting is that as many as nine meeting participants expect the benchmark interest rate to be raised by 25 bps next year. In the previous projection, there were only two FOMC participants who predicted there would be an increase in interest rates next year.
Monetary tightening should be a warning to holders of non-yielding assets such as gold. Looking back on a decade ago, the price of gold fell from its highest level when the tapering sentiment came to the fore.
An increase in the benchmark interest rate will tend to make the US dollar strengthen. The US dollar and gold are negatively correlated, meaning that when the greenback tends to appreciate, the price of gold tends to fall. This is something to watch out for in the future.
At a time when world gold prices fell slightly, Antam’s precious metal prices also fell. The price of Antam’s gold bullion, which last week was priced at Rp. 918,000/gram, has fallen this Friday keceng to IDR 917,000/gram.
This means that in this week the price of gold has decreased slightly by 0.1%. Meanwhile, the selling price of Pegadaian gold is priced at IDR 889,000/gram as of September 25, 2021.
CNBC INDONESIA RESEARCH TEAM
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