Global financial market conditions have undergone drastic changes in recent years, including in Indonesia. Gold has increasingly shown its resilience as a safe haven asset, while the stock and bond markets face considerable pressure. So, what causes this difference in performance? Is gold truly the best investment choice in 2025? This article will discuss the trend of gold versus the Indonesian stock and bond markets from an institutional perspective.
Gold Surges, Stock and Bond Markets Under Pressure
In 2025, the Indonesian financial market faced considerable pressure, characterized by a sharp decline in the stock market and only modest increases in bond yields. In contrast, global gold prices surged significantly, particularly as indicated by XAUUSD and XAUt (Tether Gold). This trend highlights gold's status as the leading safe-haven asset during times of economic uncertainty.
Read also: Bitcoin vs. Gold: Which is More Suitable for Long-Term Investment?
Indonesian Financial Market Performance (As of February 17, 2025)
Gold:
- XAUUSD (Global Spot Gold Price) +43.84%
- XAUt (Tether Gold) +44.00%
Stocks & Bonds:
- Jakarta Composite Index (IHSG) -9.5%
- LQ45 Index -23.27% MSCI Indonesia -21.15%
- Jakarta Islamic Index (JII) -14.78%
- 5-Year Bond Yield +0.4%
- 10-Year Bond Yield +1.78%
This performance indicates that gold has successfully become a superior value protection asset compared to Indonesian stocks and bonds, which have experienced significant declines.
Why Do Gold and Indonesian Stock Performances Differ?
The performance of gold and Indonesian stocks has differed significantly due to various global and domestic factors.
Global Factors Driving Gold's Rise
- The Fed's Policy: High interest rates make gold increasingly attractive as a hedge against economic uncertainty.
- Geopolitical Crises: Tensions in the Middle East and East Asia increase demand for gold as a safe haven asset.
- Decreased Liquidity in the Stock Market: Investors are starting to shift their assets from stocks to gold due to global economic uncertainty.
Meanwhile, the Indonesian stock market faces pressure from various domestic factors. Foreign investor outflows are evident from the decline in the MSCI Indonesia (-21.15%) and LQ45 (-23.27%) indices. Public purchasing power has also weakened due to high inflation, impacting the consumer sector. In addition, political uncertainty following the 2024 elections has made investors more cautious in making investment decisions.
Indonesian Bond Market Less Attractive
- Yield Increase: Increased yields due to expectations of higher interest rates make bonds less attractive.
- Credit Risk & Fiscal Deficit: The increase in national debt adds to concerns about economic stability.
Implications for Investors: Should You Switch to Gold?
Amid these conditions, investors are starting to switch to gold, especially in tokenized forms like XAUt, which is more liquid and does not require physical storage. Besides offering transparency and security through Tether Gold's backing, tokenized gold also serves as a hedge against inflation and market volatility.
As a strategy, investors are advised to:
- Reduce exposure to stocks vulnerable to capital outflow.
- Allocate a portion of their portfolio to tokenized gold (XAUt) for investment stability.
- Monitor global monetary and domestic fiscal policies before making investment decisions.
Read also: Easy Ways to Invest in Digital Gold with Tether Gold (XAUt)
In an uncertain market environment, gold—particularly in tokenized form like XAUt—has emerged as a more stable investment choice compared to Indonesian stocks and bonds. The availability of XAUt on Mobee provides investors with easy access to blockchain-based gold, making it a strategic solution for navigating current financial market challenges.
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