Jakarta, CNBC Indonesia – The price of precious metals produced by PT Aneka Tambang Tbk (Antam) or known as Antam’s gold today experienced a decline after slightly strengthening yesterday.
On Friday (21/8/2020) Antam’s gold price rose by Rp. 1,000 to Rp. 1,031,000 per gram. Today Saturday (8/22/2020) Antam’s precious metal prices fell by Rp. 4,000 to Rp. 1,027,000 / gram.
The decline in the price of this precious metal followed the world gold price. Yesterday, the world gold price fell 0.16%, today it is Antam’s turn to cut the gold price by 0.39%. Previously, when the global gold price fell by more than 3.5%, Antam’s gold price also fell by Rp 28,000 per gram or a correction of 2.64%.
The high correlation between Antam’s gold and global gold is a result of the similarity in class or type of assets. The sentiment that drives world gold prices today is the movement of the US dollar and the central bank’s monetary policy in Uncle Sam’s country or known as the Fed.
When the price of gold had dropped 3.5% this week, the sentiment felt by the market was that the central bank, led by Jerome Powell, failed to provide future guidance regarding benchmark interest rates.
In addition, the market also reacted to the Fed’s statement that it would not use the new monetary instrument, namely yield curve control that would keep US government bond yields low for a long time.
As a non-yielding asset, when yield Government bonds are still positive and attractive, so holding gold becomes unattractive for investors and eventually the yellow metal has the potential to be sold.
On the other hand, the price of gold also dropped due to the rise of the dollar from its downturn. When looking back, gold prices recorded a long rally of up to nine consecutive weeks.
The trigger, if not the dollar index, fell to its lowest level in two years. Now the correction against the dollar has started to stop. Greenback began to rise and turn to press gold.
Looking ahead, the movement of the US dollar will still be the main trigger for volatility in the gold market. A survey by Kitco shows Wall Street analysts differ on the outlook for gold prices next week.
As many as 47% of analysts surveyed said the price of gold is likely to rise higher next week. Meanwhile, another 47% of analysts expect the opposite. The rest are neutral.
In contrast to Wall Street analysts, respondents from Main Street actually saw that next week’s gold price could still strengthen. As many as 56% view it bullish that yellow metal, 25% bearish and the rest are neutral.
However, the long-term prospect of gold is still considered positive considering there are still many risks of global uncertainty around the pandemic, Washington-Beijing geopolitical tensions, and the threat of higher inflation in the future.
CNBC INDONESIA RESEARCH TEAM
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