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Gold
Source: Newsmaker.id
Gold prices continued to strengthen during Friday's trading (Sept. 18), extending a rebound after touching a nearly six-week low on Wednesday. Spot gold (XAU/USD) rose approximately 1% to US$4,385.76 per troy ounce, while gold futures traded around US$4,425.20. Over the past week, gold has gained about 0.9%, following a rebound of more than 2% in Thursday's session.
A key factor supporting gold is the decline in oil prices over three consecutive sessions. An improved supply outlook from Saudi Arabia has helped suppress energy prices and alleviate concerns that an oil price surge would exacerbate global inflation. Reduced energy-related inflationary pressure has slightly eased market concerns regarding aggressive interest rate hikes by major central banks.
Gold's movement comes amidst a wave of global monetary policy tightening. Following rate hikes by the Federal Reserve and the European Central Bank, the Bank of Japan (BoJ) also raised interest rates on Friday to a 31-year high. However, the BoJ's relatively cautious stance regarding future hikes has left investors assessing the potential duration of the global tightening cycle.
From the US, the dollar remains a factor limiting gold's gains. The US Dollar Index hovered around 100.38 after the Fed raised rates by 25 basis points and signaled that further hikes remain on the table. A stronger dollar typically exerts pressure on gold, as it makes the precious metal more expensive for holders of other currencies.
Nevertheless, investor interest in gold remains robust. Gold-backed exchange-traded funds (ETFs) have recorded inflows for several consecutive sessions, indicating that investors are maintaining their exposure to the precious metal despite the tightening global interest rate environment. Geopolitical uncertainty and concerns regarding the economic outlook continue to sustain demand for safe-haven assets.
Newsmaker Analysis: Gold's rise toward the US$4,385 level indicates that pressure from the Fed's hawkish stance is beginning to be offset by falling oil prices, easing bond yields, and investment demand for gold. However, further upside potential remains limited should the dollar strengthen again and markets become increasingly convinced that the Fed will raise interest rates further. Conversely, if energy prices continue to decline and Treasury yields extend their correction, gold's recovery momentum could be sustained. (arl)
Source: Newsmaker.id