RRI.CO.ID, Jakarta - Global gold prices have rebounded sharply after declining earlier in the week. The recovery has been driven by escalating geopolitical tensions between Iran and the United States.

After falling to around US$4,640 per troy ounce in early to mid-week trading, gold prices climbed again toward the weekend. By the end of the week, gold was trading near US$4,968 per troy ounce, approaching the key psychological level of US$5,000 amid growing global uncertainty.

Tensions between Iran and the United States remain unresolved, with no agreement reached so far. While the possibility of further diplomatic talks remains open, markets see little chance of a near-term breakthrough. Instead, investors have turned attention to the risk of a broader conflict between the two countries.

This uncertainty has pushed gold prices higher after they briefly declined on expectations of talks between Washington and Tehran in Oman. Gold has also gained support from weakening economic indicators in the United States, particularly in the labor market.

Initial jobless claims in the U.S. rose to 231,000 in January, signalling weakening labor conditions. Employment data is closely watched by markets as a key indicator for future U.S. monetary policy. 

The weaker figures have fueled speculation that the Federal Reserve may consider interest rate cuts later this year, further boosting demand for gold as a safe-haven asset. Taken together, geopolitical risks and slowing U.S. economic momentum continue to provide strong support for gold prices. 

I project that gold still has room to rise toward US$5,750 per troy ounce later this year. If geopolitical tensions intensify, prices could climb faster than if they were driven solely by economic data. At this stage, there is no strong fundamental reason for gold to reverse its upward trend.

In local currency terms, gold prices could reach between IDR 3.2 million and IDR 3.4 million per gram this year if political tensions escalate. Currently, gold is trading in the range of IDR 2.6 million to IDR 2.8 million per gram. 

The upward momentum persists, and investors are advised to stay informed about global political developments and continue holding gold under current conditions.

Gunawan Benjamin (Economist at the Islamic University of North Sumatra)