Iran-US Ceasefire: Rupiah Poised to Strengthen, Gold Could Hit Record High

The Indonesian government faces a policy dilemma with no truly comfortable options. A temporary ceasefire between the United States and Iran, mediated by Pakistan, has become a positive catalyst for global financial markets, including Indonesia. Market and commodity analyst Ibrahim Assuaibi predicts that the rupiah will strengthen and gold prices could break records. He explained that this development occurred unexpectedly when US President Donald Trump and Iran agreed to postpone the war. According to Ibrahim, this move was beyond expectations, especially after indications that Iran’s armament could disable advanced US aircraft. This situation is seen as prompting the US to consider the diplomatic route, ultimately accepting several points proposed by Iran in negotiations. The agreement includes a two-week ceasefire, encompassing the reopening of the strategic Strait of Hormuz. During this period, transportation and energy distribution activities are expected to return to normal as before the conflict escalated. The reopening of this route provides positive sentiment for the global economy, particularly as oil prices had previously surged sharply but now have the potential to decline as tensions ease. “The rupiah will strengthen quite significantly in the next two weeks. The level of Rp17,120 per US dollar is likely to be halted,” he stated in an official comment on Wednesday (8/4). This strengthening is driven by a combination of factors, including the easing of geopolitical risks and the weakening of the US dollar index. In this condition, the rupiah’s appreciation is deemed reasonable, especially as the market responds positively to the opportunity for stabilising global energy supplies through the Strait of Hormuz. Stable oil distribution also opens opportunities for countries to lower fuel prices, which had previously been raised due to pressure from world oil prices. Thus, in the short term, calm will be created in the global energy market. On the other hand, global gold prices are expected to rise. In the next two weeks, gold prices are said to have the potential to approach $5,000 per troy ounce. This increase will also impact domestic gold prices. “Precious metals are projected to approach Rp3 million per gram,” he predicted. This condition is influenced by the weakening dollar and increasing interest in safe-haven assets amid global uncertainty. In addition to geopolitical factors, the direction of US monetary policy is also a concern. There are indications of a leadership change at the US central bank, where Federal Reserve Chairman Jerome Powell is approaching the end of his term and could be replaced by Kevin Walsh. This replacement is seen as potentially driving more accommodative policies, including interest rate cuts. Ibrahim added that the decline in energy prices, including oil and petrol in the US, could also pressure inflation. With more stable inflation, the US central bank has room to cut interest rates again, which ultimately affects global market movements. Amid these dynamics, global central banks and major investors are beginning to increase allocations to gold as a safe-haven asset. The shift from the dollar to gold is seen as strengthening, especially after the dollar was previously often used as an instrument in economic conflicts. With various supporting factors, from geopolitics and monetary policy to demand and supply dynamics, “Global gold prices are expected to continue rising, even potentially reaching $6,000 per troy ounce by the end of the year,” Ibrahim emphasised.