JAKARTA - Chief Economist of Citibank NA, Indonesia, Helmi Arman, predicts gold investment will decline next year if global economic and geopolitical conditions improve.
According to him, strengthening the economy of the United States and China has the potential to encourage investors to switch from gold to other assets such as stocks and property.
"If indeed next year the United States economy recovers quickly and the Chinese economy will also be raised, then there will be new competitors for gold in terms of financial instruments," Helmi said in Jakarta, quoted by Antara, Thursday, November 6.
According to him, in recent years, around 80 percent of gold demand came from investment activities, while another 20 percent was used for industrial needs.
He said one of the biggest buyers of gold investment instruments was the central banks of developing countries that tended to increase their gold reserves due to strained geopolitics and the dynamics of US trade policy.
However, if geopolitical tension subsides and the economic outlook improves, the demand for gold for investment, both from institutions and households, will slow down.
Helmi stated that the demand for gold for household consumers in Asia, especially China and India, is the main driver of global gold sales.
"When the property and financial markets in the two countries recovered, people's interest in buying gold decreased," he said.
"In China, since the property sector was weak, the demand for households for gold has increased," he said.
Helmi estimates that the prices of basic metals, such as copper, nickel, and aluminum, will also have the potential to increase next year, considering that a recovered global economy will drive industrial activity and infrastructure that requires these metals.
Helmi believes that as a result of the current decline in the global economy, basic metal commodities tend to have less attractive prospects.
BACA JUGA:
However, he continued, if next year the United States economy begins to recover, the demand for basic non-gold metals will increase.
"That's why Citi expects next year's world gold price on average may not be as good as this year and there is the potential for basic metals to start going up stage," said Helmi.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
