Global gold prices have declined amid the war between the United\nStates (US) and Iran. Tracing back to the start of the US-Iran war,\nglobal gold prices have dropped more than 14%. Global gold prices even\nfell 11% in the past week, the deepest since 1983.<\/p>\n
Outshone by Foreign Currencies<\/p>\n
Executive Director of CELIOS, Bhima Yudhistira, assesses that gold\nassets are now outshone compared to the US dollar, Japanese yen, and\nSwiss franc as safe havens. Moreover, gold prices that have been high\nover the past two years have prompted many market players to take\nprofits.<\/p>\n
\u201cGold has become too expensive, so many traders are profit-taking\nbecause they have accumulated gold over the past two years,\u201d said Bhima,\nquoted from detikNews on Tuesday (24\/3\/2026).<\/p>\n
In addition, liquidity needs have led investors to prefer holding\ncash. According to Bhima, Uncle Sam\u2019s currency has won the battle as a\nsafe asset amid the crisis. Bhima predicts gold prices will fall to the\nlevel of Rp 1.9-2 million per gram.<\/p>\n
\u201cLiquidity needs also make gold unattractive. Now cash is king,\nmeaning the US dollar is king. After the buzz about de-dollarisation,\nthe US dollar is now winning the battle as the safest asset amid the\ncrisis. Gold prices ahead are still likely to correct, projected to the\nlevel of Rp 1.9-2 million per gram,\u201d stated Bhima.<\/p>\n
Influenced by Financial Factors<\/p>\n
Meanwhile, Economist from the Center of Reform on Economics (CORE),\nYusuf Rendy Manilet, views the decline in gold prices amid the ongoing\nconflict as unusual. This indicates that the market is more influenced\nby financial factors than geopolitics.<\/p>\n
Yusuf said expectations of high interest rates persisting longer make\ninstruments like bonds more attractive. Gold, which provides no yield,\nis temporarily abandoned by investors, thus pressuring its price.<\/p>\n
\u201cIn recent times, expectations that the Federal Reserve will hold\nhigh interest rates longer make instruments like bonds more attractive.\nGold, which provides no yield, is temporarily abandoned by investors,\nthus pressuring its price,\u201d explained Yusuf.<\/p>\n
In line with Bhima, Yusuf mentioned that the strengthening US dollar\nexchange rate is also pressuring gold prices. Gold, priced in US\ndollars, becomes relatively more expensive for global investors,\nweakening demand.<\/p>\n
\u201cThis makes demand not as strong as usual even though the global\nsituation is still full of risks. In this context, the market seems to\nsee that the conflict between Iran, the United States (US), and Israel\nhas not reached a level that truly disrupts global economic stability,\nso the push towards safe-haven assets like gold is not yet strong,\u201d said\nYusuf.<\/p>\n
Investors Shifting to Bonds<\/p>\n
According to Yusuf, safe-haven assets are no longer centred on gold.\nSome investors are instead shifting to the US dollar and US government\nbonds.<\/p>\n
\u201cInterestingly, safe-haven assets are not only gold at the moment.\nSome investors prefer the US dollar and US government bonds, making\ndemand for gold more fragmented. This differs from the classic pattern\nwhere gold is usually the main destination when global risks increase,\u201d\nexplained Yusuf.<\/p>\n
Yusuf assesses that the direction of gold prices is greatly\ndetermined by interest rate dynamics and geopolitical escalation. If\ninflation eases and interest rates fall, gold has the potential to\nstrengthen again.<\/p>\n
\u201cOn the other hand, if the global conflict widens and starts\nimpacting the real sector, such as energy or trade, then demand for gold\nas a hedge asset could also increase,\u201d revealed Yusuf.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/reasons-for-the-decline-in-gold-prices-since-the-us-iran-war-1774363878", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }