Jakarta, CNBC Indonesia – The price of gold has soared after the collapse of the US dollar. In trading on Tuesday (20/12/2022), gold closed at US$1,817.41 per troy ounce. The price flew by 1.7%. This strengthening also brought gold back above the psychological $1,800 per troy ounce level.
The strengthening continues, in trading on Wednesday (21/12/2022) at 06:18 WIB, the world price of gold on the spot market was US$1,818.06 per troy ounce, or up 0.04%.
RJO Futures analyst Bob Haberkorn explained that gold is accelerating again after the US dollar collapse. The dollar index closed yesterday at 103.97, the lowest since December 14, 2022.
Currency Greenback weakened especially after the Japanese central bank (BOJ) surprisingly raised product curve control (YCC).
The BOJ still maintained its low interest rate at minus (-) 0.1%, but the YCC policy was expanded to 50 basis points from the previous 25 basis points.
YCC is the BoJ’s policy of holding yields (product) 10-year bonds close to 0%. When yields start to drift away from 0%, the BoJ will buy bonds.
The purchase means that the BoJ is injecting liquidity into the economy.
Now, with the YCC expanded to 50 basis points, the BoJ’s policies have become more flexible and the liquidity injected into the economy has decreased.
“The Japanese central bank’s decision was a ‘perfect storm’ (to support gold). Of course there are still dark shadows on the gold market, but I think gold will strengthen going forward,” said one analyst. Of Circle Squared Alternative Investments, Jeffrey Sica, quoted by Reuters.
CNBC INDONESIA RESEARCH TEAM
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