LOGIC.co.id – Global gold prices have plummeted this week, followed by a decline in domestic gold bullion prices. The drop is linked to various factors, primarily the unexpected outcome of the 2024 US Presidential Election.
Gold Prices Hit Two-Month Low
As of Friday (November 15, 2024), spot gold prices fell 0.1 percent to $2,565.49 per troy ounce, marking the lowest level since September 12, 2024. Over the past week, gold prices have declined by more than 4 percent.
In Indonesia, gold bullion prices from PT Aneka Tambang (Persero) Tbk (Antam) also weakened:
- Monday (November 11, 2024): IDR 1,517,000 per gram
- Friday (November 15, 2024): IDR 1,468,000 per gram (down by IDR 49,000 per gram).
The buyback price also dropped, from IDR 1,371,000 per gram earlier this week to IDR 1,318,000 per gram by the end of the week, a decline of IDR 53,000 per gram.
Trump’s Victory Shocks the Market
According to Ibrahim Assuaibi, Director of PT Laba Forexindo Berjangka, the main reason for the drop in gold prices is Donald Trump’s victory in the 2024 US Presidential Election, which caught the market off guard.
“The market had anticipated Kamala Harris would win. Trump’s victory raises concerns among investors about potential trade wars, especially with China,” Ibrahim told LOGIC.co.id on Sunday (November 17, 2024).
Investors also fear Trump’s economic policies could lead to rising inflation in the US. At the same time, the Federal Reserve (The Fed) is unlikely to lower interest rates soon, prompting investors to sell off gold and shift to other assets, including cryptocurrencies.
Elon Musk’s Role and Cryptocurrency Popularity
Interestingly, Trump’s campaign for the 2024 election was supported by tech entrepreneur Elon Musk, a vocal advocate for cryptocurrencies. During the campaign, cryptocurrency was even used as a medium of exchange.
“This situation is driving investors to take profit on global gold prices and redirect their funds to crypto assets,” Ibrahim explained.
Impact on Rupiah and Precious Metals
The decline in global gold prices has affected the prices of gold bullion in Indonesia. However, the impact has been mitigated by the weakening rupiah against the US dollar.
- Friday (November 15, 2024): The rupiah closed at IDR 15,874 per US dollar, down 0.07 percent from the previous day.
- Over the week, the rupiah depreciated by 1.29 percent from IDR 15,672 per US dollar on Friday (November 8, 2024).
Ibrahim noted that the weaker rupiah limited the domestic gold price drop. “Precious metals in Indonesia didn’t fall as much because the rupiah also weakened,” he said.
Trump’s victory in the 2024 US Presidential Election, investor concerns over new trade wars, and the rising popularity of cryptocurrencies are the main factors behind the sharp decline in global gold prices. In Indonesia, the impact has been cushioned by the weakening rupiah.
