Indonesian investors flock to gold amid economic uncertainty
JAKARTA: Global prices soared to an all-time high this week as many investors, including individuals at home, turn to the precious metals as a safe haven asset amid geopolitical and global economic uncertainty.
Gold hit a record US$2,942.70 (Rp 48.1 million) per ounce in Asian spot trading on Tuesday (Feb 11), marking an increase of 11.2 per cent since the beginning of 2025.
“Aligning with the international market trend,” gold prices in Indonesia had been on an upward trend since early 2024, Statistics Indonesia (BPS) spokesperson Amalia Adininggar Widyasanti said in a meeting on Monday.
She quoted the recent gold price recorded by state-owned diversified mining firm PT Aneka Tambang (Antam) of Rp 1.6 million (US$97.8) per gram as of Feb. 9, up from Rp 968,049 (US$61.50) one year earlier. Antam previously reported a significant rise in its gold sales volume, which rose to 15,209 kilograms (488,981 troy ounces) in the fourth quarter of last year, more than double the 6,669 kg it sold in the final quarter of 2023. For the full year of 2024, the mining firm logged a 68 per cent increase in gold sales to 43,776 kg, according to Antam’s quarterly report released on Jan. 31.
“In 2024, the global gold price increase was driven by global macroeconomic factors and geopolitical conditions that have also pushed up domestic demand,” Antam spokesman Syarif Faisal stated in the same report.
Likewise, analysts interpret the growing popularity of gold as consumers’ and investors’ response to economic and geopolitical uncertainty, especially with inflation remaining a concern in the United States and with Washington’s tariff policy possibly triggering retaliation by other countries, leading to trade wars.
US inflation unexpectedly rose to three per cent in January, according to official data published Wednesday. Aside from inflation concerns, Institute for Development of Economics and Finance (Indef) researcher Abdul Manap Pulungan noted the recent price declines for global commodities, such as oil, coal and others.
“So, there’s a shift in investment funds toward gold,” he said. Abdul also pointed to the role of gold as a go-to asset amid uncertainty with its low-risk, high liquidity and steady growth for long-term investment.
He said he saw the upward trend continuing this year as there were no signs of economic relief, noting that the gold price tends to increase in times of heightened uncertainty.The expectation of a further price rise, he explained, also underpinned demand for the precious metal.
Financial economist and fund manager Hans Kwee emphasized the impact of US President Donald Trump’s policy on gold prices, arguing that the new US president’s threat to slap tariffs on imports from several countries fueled fears of trade wars and inflation concerns.
Aside from higher tariffs imposed on goods from Canada, Mexico and China, Trump announced general tariffs on aluminum and steel earlier this week. “This uncertainty in the global market has prompted people to invest in gold,” Kwee said, adding that emerging markets experienced rising capital outflows, followed by corrections, which fueled a sense of uncertainty, leading investors to buy gold as a safe haven asset. He predicted that the positive trend in the gold price would continue this year.
The gold rally has drawn many retail investors, like 24-year-old private sector employee Satria, said that he had only turned to gold in January. He now sees stocks as a less promising investment because of negative market sentiment and high capital outflows.
“[Gold] has lower risks. Besides, the trend is currently increasing,” he said, adding that he invested in gold with a long-term view. In about a month, Satria made 7 per cent returns on his digital gold investment.
Annisa, a young stock investor based in Bandung, West Java, said that she was planning to invest in gold after noticing the trend. She is considering allocating 20 per cent of her investment to gold, while also seeking to diversify her assets in stocks, mutual funds and crypto.
Meanwhile, Reny, a private-sector worker who has been investing in gold for more than two years, has seen a 30 per cent increase in value. She said she holds physical gold and collects jewelry, which she said has its own appeal and motivated her to “buy more”. “The price tends to be more stable, and [gold is] easy to sell when I need money,” she said. – The Jakarta Post/ANN