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Gold can buttress your portfolio amid inflation, virus risk: Analysts
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An employee presents gold bars of various sizes for investment at a gold outlet in Malang, East Java, in April 2017. (Antara/Ari Bowo Sucipto)
W
ith the stock market at an all-time high and inflation rising fast, some analysts advise having gold in your portfolio to prepare for global economic uncertainty and the ongoing risk of COVID-19.
Monex Investindo Futures research head Ariston Tjendra said the hike in inflation was fueling gold prices as investors were seeking to secure asset values against rising inflation. The gold market is also projected to gain from the expectation of new COVID-19 waves across many countries, which pose the threat of another global economic downturn.
However, a hike in the United States Federal Reserve’s key interest rate next year could hamper the rise in the gold price next year.
“Gold is a viable option for long-term investment. The pandemic has yet to end, and there is a possibility of new waves that could affect international gold prices,” Ariston told The Jakarta Post on Nov. 12.
In the US, the consumer price index (CPI) rose 6.2 percent year-on-year (yoy) in October, marking the country’s highest inflation rate in three decades, while China’s annual inflation rose to 1.5 percent in October, the highest rate in 13 months.
In Indonesia, inflation has been on the rise, albeit still at a relatively low rate of 1.66 percent yoy in October, according to Statistics Indonesia. However, the Finance Ministry warned in October of a possible spillover of global inflation on domestic prices.
Read also: No equity 'bubble' in Indonesia, for now
