The Influence Of Geopolitics And Exchange Levels On Gold Prices In Indonesia

Pocut Ainiah; Hayatun Nufus

doi:10.63922/ijebir.v5i05.5746

Pocut Ainiah Universitas Islam Aceh
Hayatun Nufus Universitas Islam Aceh

DOI: https://doi.org/10.63922/ijebir.v5i05.5746

Keywords: Geopolitical Risk, USD/IDR Exchange Rate, Gold Price, Safe Haven, Indonesia

Abstract

This study aims to analyze the effects of geopolitical conditions and exchange rates on gold prices in Indonesia during the 2021–2025 period. The research employed a quantitative approach using secondary time-series data obtained from the Geopolitical Risk Index (GPR), Bank Indonesia (JISDOR), and PT Aneka Tambang Tbk (Antam). The data were analyzed using multiple linear regression after fulfilling the classical assumption tests, including normality, multicollinearity, heteroscedasticity, and autocorrelation tests. The findings indicate that geopolitical risk has a positive and significant effect on gold prices in Indonesia. Rising global geopolitical uncertainty encourages investors to shift their investments toward safe-haven assets, thereby increasing the demand for and price of gold. Furthermore, the USD/IDR exchange rate also has a positive and significant effect on domestic gold prices. The depreciation of the Indonesian rupiah against the US dollar leads to higher domestic gold prices because gold is traded internationally in US dollars. Simultaneously, geopolitical conditions and exchange rates explain variations in gold prices in Indonesia during the observation period. These findings imply that investors should consider global geopolitical developments and exchange rate movements when making gold investment decisions, while policymakers should maintain macroeconomic stability to mitigate the impact of global uncertainty on the domestic financial market.

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