The price of gold continues to soar. Antam's gold price today even broke its highest record for the last 10 years. However, conditions need to be watched out for. Investors are asked to continue to wait and see, do not immediately divert their capital to gold because in the near future the price of gold can be corrected again.

Gold analyst and also Director of PT Garuda Indonesia Futures TRFX Ibrahim Assuaibi said in detikcom that in a volatile price condition to invest in precious metals, investors must be careful, that is, they must wait and see, because it could be that with this price increase it could become trap.

According to him, the price of gold is currently high because the leaders of European countries agreed to create a recovery fund of US $ 858 billion (€ 750 billion) to rebuild the EU economy from the impact of the Coronavirus.

Likewise in the United States, there is now collusion at the US Congress and Senate to extend the unemployment benefits program and submit an additional stimulus of US $ 1 trillion. When it has passed the budgeting process of the two stimulus, the price of gold will be corrected back to the previous level.

There Will be No Additional Stimulus for Gold

Ibrahim also said that when the stimulus is finished, the next week there will be no more stimulus, so at the beginning of the month there will be no stimulus, so the possibility of the large gold price will be corrected soon. Because market participants will return to what problem, the antidote for the Coronavirus pandemic.

Massive stimulus becomes a supporter of gold prices to strengthen because of the real threat of inflation going forward. Gold as a hedging or safe-haven asset is flooded with demand when there is a threat of high inflation and a decline in the exchange rate.

The increase in gold prices was triggered by the risk of global economic uncertainty due to the coronavirus pandemic (Covid-19) originating from Wuhan City, Hubei Province, China which spread throughout the country.

The Covid-19 pandemic has triggered regional restrictions or lockdowns across countries in order to mitigate the spread, thus impacting the cessation of the global economy. In turn, it reduces the prospects for a V-shaped economic recovery and impacts on global risk sentiment.

In the Short Term Gold Will be Corrected

Gold investment which is considered as a hedge (hedging) in times of economic uncertainty due to the coronavirus pandemic, shows that this one instrument is the most sought-after safe-haven asset when the economic situation is on the brink of recession.

Therefore, many analysts predict gold prices will set the highest record of all time seen since nine years ago. Some predict gold will reach US $ 2,000 / troy ounce to US$ 3,000 / troy.

Relative Strength Index (RSI) indicator as a momentum indicator that compares the magnitude of recent increases and decreases in price over some time and serves to detect overbought conditions above 70-80 levels and oversold levels below 30- 20.

Overall, through a technical approach with BB indicators that are in the resistance area with lines widening, then the next movement tends to strengthen. However, the strengthening will be limited which is confirmed by the RSI indicator which is already in the overbought area.

Meanwhile, for the short term, the price of gold has the potential to consolidate or be corrected to form a new footing. However, for the long term as long as the price of gold is not below the area of US $ 1,850 / troy on and does not penetrate the level of US $ 1,800 / troy ounce which indicates a change in the medium-term trend of gold will continue to move up.