Indonesia's Trade Ministry Notes Gold Price Drop Amid Weakening Demand

Indonesia's Ministry of Trade has observed a decrease in the reference price for gold exports and a reference price for the second half of July 2026. This decline is attributed to weakening demand and a shift in investor funds, according to the ministry.

Director General of Foreign Trade Tommy Andana explained that rising bond yields in major developed economies are encouraging investors to move their capital to interest-bearing assets. This trend has led to a drop in gold prices, with some investors selling to lock in profits. "The increase in bond yields and still high interest rates in several developed countries are encouraging investors to shift funds to interest-bearing assets. This results in weakening gold prices and some investors taking sell actions to secure profits," Andana stated.

The export reference price (HPE) for gold during this period is set at $131,839.51 per kilogram, marking a 2.71% decrease from $135,512.62 per kilogram in the first half of July. Similarly, the reference price (HR) for gold has fallen to $4,100.67 per troy ounce from $4,214.92 per troy ounce previously. These prices are determined by the Minister of Trade's Decree No. 1559 of 2026, which applies from July 15-31, 2026.

The establishment of these prices relies on technical data and input from the Ministry of Energy and Mineral Resources, referencing publications from the London Bullion Market Association (LBMA). The process involves coordination across ministries and institutions, including input from the Coordinating Ministry for Economic Affairs, Ministry of Energy and Mineral Resources, Ministry of Finance, and Ministry of Industry.

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The increase in bond yields and still high interest rates in several developed countries are encouraging investors to shift funds to interest-bearing assets. This results in weakening gold prices and some investors taking sell actions to secure profits.