The gold price has the potential to return to US $ 2,000 in the fourth quarter

ILLUSTRATION. On Friday (18/9), the spot gold price was at US $ 1,950.86 per troi ounce.

Reporter: Wahyu Tri Rahmawati | Editor: Wahyu T. Rahmawati

KONTAN.CO.ID – JAKARTA. The price of gold is still strengthening in the week despite fluctuating movements in the last five trading days. Gold prices rose for two consecutive weeks after slumping in early September.

On Friday (18/9), the spot gold price was at US $ 1,950.86 per troi ounce, up 0.53% in the week. Meanwhile, the price of gold futures for December 2020 delivery on the Commodity Exchange closed at US $ 1,962.10 per troi ounce, up 0.73% in a week.

The strengthening of the gold price was mainly due to the weakening of the US dollar exchange rate. The dollar index, which reflects the exchange rate of the US dollar against major world currencies, fell to 92.93 at the end of this week from 93.33 last week. “Gold prices still have the potential to strengthen because the dollar will weaken,” said Edward Meir, an analyst at ED&F Man Capital Markets Reuters.

He added that the price of gold is likely to strengthen because the Federal Reserve and stimulus from world central banks and fiscal stimulus all lead to higher gold prices. This Wednesday, the Fed promised to maintain its benchmark interest rate in the long term.

Also Read: Antam’s gold price at Pegadaian this morning is IDR 1,072,000 per gram (19 September 2020)

Low interest rates make gold investment more attractive because instruments with interest do not offer yield tall one. “We believe the potential risk is still a potential increase in gold prices and estimate the price will be at an average of US $ 2,000 per troi ounce in the fourth quarter and US $ 2,125 per troi ounce next year,” said Suki Cooper, an analyst at Standard Chartered.

“Beyond short-term corrections, negative real yields and dollar weakness accompanied by unprecedented massive stimulus, created favorable conditions for gold and a crutch in the coming months,” Cooper added.

Also Read: Antam’s gold price today stands at IDR 1,030,000 per gram, Friday (18/9)