Syailendra: Geopolitics support gold, while real yields pose pressure

Investors are currently facing conditions that are quite attractive for reconsidering gold.

Investment management firm PT Syaillarndra Capital assesses that geopolitical risks have the potential to support gold, while high real yields remain a factor that could restrain the rise of precious metal prices.

Syanne Gracetine Polii, Head of Investment Specialist at PT Syailendra Capital, stated that gold movements are currently facing several positive catalysts alongside factors that could exert pressure on prices.

“Investors are now faced with conditions that are quite attractive to look at gold again,” Syanne said during the Syailendra Media Talks titled “Gold 360°: One Asset, Four Perspectives” in Jakarta on Monday.

According to the presentation materials, gold prices recorded an increase of approximately 227 per cent compared to the beginning of 2016, reaching a peak on 28 January 2026. Subsequently, gold prices experienced a correction of about 26 per cent during the January-June 2026 period.

Syanne identified geopolitical risk as one of the positive catalysts for gold. She cited the rising tensions between the United States and Iran on Monday morning, which also triggered an increase in oil prices.

“Furthermore, regarding geopolitical risk, if you look at around 5 am or 6 am, there was another US attack on Iran, which caused oil prices to spike again,” she said.

In addition to geopolitics, she mentioned central bank purchases, dedollarisation, fiscal concerns, global gold ETF inflows, and the need for portfolio diversification as factors that could support gold demand.

On the other hand, pressure on gold stems from high real yields and the strengthening of the US dollar. As an asset that provides neither interest nor coupons, the relative attractiveness of gold may decrease when the yields on interest-bearing assets increase.

The Federal Reserve (The Fed) maintained its benchmark interest rate target range at 3.50-3.75 per cent during its meeting on 28-29 July 2026. This decision aligns with the US central bank’s efforts to control inflation, which remains above target.

Fed Chair Kevin Warsh stated on Friday (28/8) that annual inflation, based on the Personal Consumption Expenditures (PCE) price index, remains at 3.7 per cent, higher than the Fed’s 2 per cent target.

“The challenges are equally significant. If we look here, higher real yields—spikes in bond yields, particularly in the US—are still occurring. Additionally, the US dollar also spiked this morning,” said Syanne.

The impact of the strengthening US dollar is also visible in the domestic market. The Rupiah weakened by 57 points or 0.32 per cent to Rp17,750 per US dollar at the start of Monday’s trading, from the previous close of Rp17,750 per US dollar. This depreciation occurred as the market responded to Warsh’s inflation-hawkish statements.

Regarding demand, Syailendra’s materials noted that Poland was the largest net purchaser of gold among central banks in the first half of 2026 with an addition of 82 tonnes, followed by Uzbekistan with 41 tonnes, China with 40 tonnes, and Kazakhstan with 27 tonnes.

According to Syanne, central bank purchases over the last three years have become an increasingly dominant source of gold demand, whereas jewellery demand previously held a larger share.

Domestically, Antam gold prices were recorded as stable at Rp2,670,000 per gram on Monday morning, with a buyback price of Rp252,300 per gram. On Saturday (29/8), Antam gold prices fell by Rp48,000 to Rp2,670,000 per gram from the previous Rp2,718,000 per gram.

Beyond monitoring price movements, Syanne believes gold should be viewed based on its function as a portfolio complement, as its movements can differ from stocks or bonds.

“Therefore, the function of gold is not to be a core portfolio, but for our diversification,” she noted.

In a Syailendra simulation, a portfolio composed of 60 per cent stocks and 40 per cent bonds experienced a decline of approximately 22 per cent during the 2008 global financial crisis. After reallocating 10 per cent of the bond portion to gold, the portfolio decline was reduced to approximately 18 per cent.

A similar simulation showed that the portfolio decline during the COVID-19 pandemic decreased from approximately 17 per cent to 14 per cent after a 10 per cent gold allocation. During the 2022 interest rate volatility, the decline decreased from 16 per cent to 13 per percent.

Nevertheless, Syanne warned that these supporting factors do not guarantee that gold prices will continue to rise. In addition to real yields and the US dollar, profit-taking, increased interest in risky assets, high valuations, jewellery affordability, and mining supply responses could pose challenges to gold prices.

“It does not mean that once we buy gold now, it will rise tomorrow, nor does it mean that once we buy gold, there will be no corrections in the future,” Syanne concluded.