Jakarta, CNBC Indonesia – The price of precious metal gold produced by PT Aneka Tambang Tbk on Tuesday (6/2/2024) at the LM Graha Dipta Pulo Gadung gold boutique fell by IDR 10,000 per gram to IDR 1,130,000.
Likewise with prices buyback (the price used when reselling gold) is at IDR 1,027,000 per gram.
Antam's gold was weighed down by world gold which fell as a result of a solid US jobs report and statements from officials from the Federal Reserve (The Fed) dashing expectations of an early interest rate cut.
“We saw an adverse effect from Friday's strong jobs report that pushed Treasury yields and the U.S. dollar index higher, and that continued today, and weighed on gold,” Jim Wyckoff, senior analyst at Kitco Metals, toldReuters.
However, gold should hold above the US$2,000 per troy ounce level as geopolitical uncertainty in the market could quickly drive up safe-haven demand, he added.
Data on Friday showed that US nonfarm payrolls increased by 353,000 jobs in January 2024, the largest increase in a year.
Rapid job growth and big wage increases dashed prospects for a Fed rate cut next month. Market players also lowered their bets on a cut in borrowing costs at the end of the US central bank's meeting on April 30-May 1, 2024.
The Fed could be “cautious” in deciding when to lower its policy interest rate, as a strong economy gives central bankers time to build confidence that inflation will fall further, Fed Chair Jerome Powell said in an interview.
Investors' focus now turns to statements by a number of Fed speakers this week for further clues on the timing of interest rate cuts.
Gold prices are very sensitive to movements in US interest rates. An increase in US interest rates will make the US dollar and US Treasury yields strengthen. This condition is not beneficial for gold because the strengthening dollar makes it difficult to buy gold so demand falls. Gold also does not offer yields so rising US Treasury yields make gold less attractive.
CNBC Indonesia Research
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