Rupiah Strengthens as Gold Prices Reach Record High of $2,670
Jakarta. The Indonesian rupiah strengthened against the US dollar on Wednesday, while gold prices hit a record high of $2,670 per ounce.
Gold prices soared to a record high of $2,670 per ounce on Wednesday, surpassing the previous key resistance level of $2,650.
The rupiah's exchange rate against the US dollar rose by 85 points in interbank trading in Jakarta on Wednesday afternoon, closing at Rp 15,102, compared to Rp 15,187 per dollar the previous day.
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Ibrahim Assuaibi, director of Laba Forexindo Berjangka, indicated that gold prices may continue to strengthen, with the possibility of reaching $2,700 by October.
He highlighted several factors supporting the bullish trend for both gold and the rupiah. Firstly, there is a possibility that the US Federal Reserve may cut interest rates by 50 basis points in their upcoming meeting in November, which is expected to stimulate the country's economic recovery.
"This expectation for a significant rate cut is also supported by comments from several Fed officials," Ibrahim added.
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Secondly, the People's Bank of China (PBoC) is expected to implement massive stimulus measures aimed at revitalizing its economy, which has been struggling due to the ongoing property crisis. This action suggests that the Chinese government will inject funds into various industries to encourage growth.
"This has renewed investor interest in gold as a safe-haven asset," he emphasized.
In related news, the Asian Development Bank (ADB) has revised its growth forecast for developing economies in Asia to 5 percent for 2024, up slightly from its April estimate of 4.9 percent. The ADB maintained its GDP projections for Indonesia at 5 percent for both 2024 and 2025, with the inflation rate expected to remain at 2.8 percent.
However, the ADB warned of potential risks from trade sanctions, particularly higher tariffs on Chinese exports, depending on the outcome of the US presidential election.
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