By Gayatri Suroyo
JAKARTA (Reuters) – Hundreds of Indonesians are flocking to buy gold bars, betting that the precious metal’s value could shield them from tougher economic times ahead as the currency and the stock market tumble in South East Asia’s largest economy.
Indonesia is among dozens of countries affected by U.S. President Donald Trump’s tariffs, which took effect on Wednesday and have sent shockwaves through many economies. The rupiah has already hit historic lows, despite central bank intervention.
While Indonesian authorities and some economists said the tariffs might have limited impact on the country, which relies more on its large domestic market as an economic engine, the risk-off sentiment over the future of its exports to the U.S. in electronics, footwear and clothing has hit financial markets.
While investors dumped stocks, sales at gold store chain Galeri24 tripled to reach over 65 kg each day since stores reopened after a holiday break this week, company director Endah Susiani told Reuters.
At a branch in central Jakarta, clerks worked hours past closing time to tend to nearly 200 customers each day mostly seeking to buy small gold bars of up to 10 grams, sold at a price of about 1,770,000 rupiah ($105) per gram on Wednesday.
Suhud Syahrani, 35, who works in the information technology sector, bought several bars. He said he had researched long-term investment options, hoping to buy a house one day, and was glad he did not choose to put his money in stocks or mutual funds.
“The stock market was decimated,” he said. “Our economy is weakening.”
The rupiah hit a record low of 16,970 a dollar on Wednesday, while the stock market extended losses after a more than 7% plunge the previous day, catching up with falls in other markets after an extended break for Eid al-Fitr at the beginning of April.
Pawn shop firm Pegadaian saw customers opening gold savings accounts worth 84 kg in a day on Tuesday, up from around 25 kg a day typically since it launched a bullion banking business on February 26, marketing director Elvi Rofiqotul Hidayah said.
Both Pegadaian and Galeri24 are part of lender Bank Rakyat Indonesia.
Hundreds of people also formed long lines at pop-up gold stores operated by miner Aneka Tambang during the holidays as global gold prices jumped, local media reported. Gold hit a record high of $3,167.57 an ounce on April 3, driven by trade war concerns.
“Now is an era of uncertainty. It’s extraordinary. Because of the trade war, reciprocal (tariffs), there is a tremendous impact on gold prices and the people understand this and they hope to protect their wealth against inflation,” Elvi said.
Some customers were young and likely had moved their investment from equities and cryptocurrencies to gold, Elvi said.
($1 = 16,860.0000 rupiah)
(Reporting by Gayatri Suroyo; Editing by Alison Williams)
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