20 January 2026
Defensive Positioning as Gold Rallies and Macro Risks Intensify
Market Commentary
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Global commodity markets have turned volatile again following an unexpected escalation in geopolitical tensions. Gold and silver prices surged to fresh all-time highs, driven by a sharp increase in safe-haven demand. The renewed tension was sparked by U.S. President Donald Trump’s threat to impose new tariffs on several European countries following a dispute over Greenland, reigniting investor concerns over the stability of trans-Atlantic relations.
The escalation stems from President Trump’s ambition to acquire Greenland, an Arctic territory under the sovereignty of the Kingdom of Denmark. Firm rejection from European leaders was met with threats of economic retaliation in the form of import tariffs of 10% starting February 1, set to rise to 25% by June. The eight European countries potentially affected include Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. The European Union has warned that such measures pose significant risks to global economic and political stability.
Beyond geopolitics, bullish sentiment toward gold has been reinforced by U.S. monetary policy signals. Federal Reserve Vice Chair Michelle Bowman signaled that the central bank is prepared to cut interest rates should the labor market show signs of weakening. While rates are expected to remain on hold at the January 27–28 meeting, markets are increasingly pricing in at least two 25-basis-point rate cuts in 2026, further enhancing gold’s appeal as a hedge.
Optimism surrounding precious metals is also reflected in aggressive forecasts from global analysts. They have set a new bullish three-month target, projecting gold prices at US$5,000 per ounce and silver at US$100 per ounce. These projections reflect expectations of prolonged global uncertainty and looser monetary policy—historically key catalysts for sustained rallies in gold prices.
The escalation stems from President Trump’s ambition to acquire Greenland, an Arctic territory under the sovereignty of the Kingdom of Denmark. Firm rejection from European leaders was met with threats of economic retaliation in the form of import tariffs of 10% starting February 1, set to rise to 25% by June. The eight European countries potentially affected include Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. The European Union has warned that such measures pose significant risks to global economic and political stability.
Beyond geopolitics, bullish sentiment toward gold has been reinforced by U.S. monetary policy signals. Federal Reserve Vice Chair Michelle Bowman signaled that the central bank is prepared to cut interest rates should the labor market show signs of weakening. While rates are expected to remain on hold at the January 27–28 meeting, markets are increasingly pricing in at least two 25-basis-point rate cuts in 2026, further enhancing gold’s appeal as a hedge.
Optimism surrounding precious metals is also reflected in aggressive forecasts from global analysts. They have set a new bullish three-month target, projecting gold prices at US$5,000 per ounce and silver at US$100 per ounce. These projections reflect expectations of prolonged global uncertainty and looser monetary policy—historically key catalysts for sustained rallies in gold prices.
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On the domestic front, these external pressures have spilled over into the currency market, with the Indonesian rupiah weakening to an all-time low of Rp16,988 per U.S. dollar, surpassing levels seen during the 1998 Asian Financial Crisis. The rupiah’s depreciation has further strengthened the appeal of U.S. dollar–denominated assets and commodities such as gold among global and regional investors.
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With pure-play gold miners already pricing in much of the upside, investors may increasingly look for alternative exposures that offer defensive characteristics without fully chasing the trade. In this context, diversified names with optional gold exposure provide a more balanced risk-reward, allowing investors to stay positioned for elevated gold prices while relying on core cash flows to cushion downside risk should volatility persist.
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Against this backdrop, UNTR has seen improving investor sentiment, despite gold not being its core business. While the temporary suspension of Martabe since December 2025 has limited gold’s contribution, the impact is viewed as transitory and partially offset by low-cost production from Sumbawa Jutaraya, reinforcing UNTR’s defensive profile. With a diversified business portfolio, attractive valuation at around 6x 2026 PER, and coal remaining the main earnings backbone, UNTR is positioned defensively amid ongoing macro uncertainty. A potential reopening of Martabe during a period of elevated gold prices could further support sentiment, although it is not considered a primary earnings driver.
Written by Boris, the Broker
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