Price Performance Indicator

Gold Focus:

• within a week of (14/03-18/03) ICDX gold price weakened 0.03%
• The Fed issued a policy of increasing interest rates by 25 basis points

Market Review

ICDX gold price moved 0.03% lower than the previous week with gold prices moving down due to the effect of profit taking on the Fed's decision which was in line with market participants' estimates, namely increasing interest rates by 25 basis points and the Russian invasion of Ukraine.

World gold prices once again hit the 2000 per troy ounce mark in March after earlier gold prices also had a chance to rise to reach 2000 per troy ounce zone last August. The rise in March was due to Russia invasion of Ukraine, the function of gold as a hedge is increasingly being hunted down by market participants, the market participant's concerns over Russia continued attack on Ukraine sent gold prices soaring. The price of gold products has gone up quite sharply, market players have begun to withdraw their profits, resulting in a sell-off that causes the price of gold to fall.

The high rate of US inflation was reported to have touched the level of 7.9%, which was the highest level in 40 years. The Fed already expects high inflation figures. Last Wednesday, the Fed issued a policy of increasing interest rates by 25 basis points, this is in line with market participants' estimates. The increase in interest rates made yield the 10-year tenor United States (US) government bond.

Market View

In the National Association for Business Economics, Chairman of The Fed's Jeremy Powell, stated that a very high US inflation could slow down the economic recovery, The Fed will implement a more hawkish policy to raise interest rates more aggressively, which is more than 25 basis points at each meeting to suppress high inflation rates. In the dot plot of the FOMC economic projections for 2022, members of the monetary policy committee predicted interest rates at the end of 2022 could be increased up to 7 times ranging from 1.75% to 2%.

In the future, the movement of gold prices will decline in line with the Fed's policy decision to increase interest rates. more aggressive interest rates. Interest rates are the major obstacles of driving gold products, high interest rate could cause market players to be more interested in investing in financial products with yields than investing in gold products as a hedging asset.

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