World Gold Prices Drop, This is the Cause

NEW YORK, KOMPAS.com – Price gold the world fell by 3 percent at the close of trading Wednesday (Thursday morning WIB). This was driven by the decline in crude oil prices which made risky assets rebound and investors took profit.

quote CNBC, Thursday (10/3/2022), gold price The world’s spot market fell 3.3 percent to 1,983.96 US dollars per troy ounce. This halted a rally that had brought gold to touch levels above $2,000 a troy ounce for the first time since August 2020.

Meanwhile, the New York Exchange Comex gold futures price fell 2.7 percent to 1,988.20 US dollars per troy ounce.

Also read: Drops sharply, Antam’s gold price drops to Rp 26,000 per gram

“Things can’t keep going up. At some point, a level of balance has to be reached,” said Edward Meir, analyst at ED&F Man Capital Markets.

The Russo-Ukrainian war showed several de-escalations on Wednesday and made world oil prices fall, after briefly rebounding due to US and British policies banning oil imports from Russia. This condition provided some economic assistance after a number of commodities continued to experience inflation.

Meanwhile, world crude oil prices corrected after statements from the United Arab Emirates and Iraq which stated they were willing to increase their oil production and would ask the same from the global oil-producing alliance OPEC+.

On the other hand, when world oil prices fell, the stock market actually rebounded because investors began to switch to riskier assets. The stock market had fallen due to investor concerns over sanctions imposed by the US and its allies against Russia.

When the economic uncertainty and geopolitical conflict occurred, gold as a hedging asset was indeed sought after by investors. But as the price of crude oil fell and investors began to shift to the stock market, the price of gold also followed to a lower level.

However, analysts assess that the reversal in gold prices cannot be separated from profit-taking by market participants, after gold continued to show an increase to levels above 2,000 US dollars per troy ounce.

Analysts also assess that gold may return to the level of 2,000 US dollars per troy ounce in the future, although the risk of downward pressure can persist.

“Gold will remain a very volatile trade and will likely revolve around the $2,000 level,” said Ed Moya, analyst at online trading platform Oanda.

Also read: World Gold Price Breaks to Levels Above 2,000 US Dollars

Get updates news of choice and breaking news every day from Kompas.com. Let’s join the Telegram group “Kompas.com News Update”, how to click the link https://t.me/kompascomupdate, then join. You must first install the Telegram application on your cellphone.–