A prolonged weakness in gold prices seems unlikely with long-term fundamentals remaining in favour of the yellow metal. 

Even as gold prices on COMEX have dropped 7% so far in November, experts believe the possibility of more interest rate cuts and higher inflation could boost demand for the precious metal. 

Nevertheless, gold has struggled since the outcome of the US presidential election last week as the dollar surged. 

A stronger dollar weighed on gold as it made the yellow metal more expensive for overseas buyers, thereby limiting demand. 

Carsten Fritsch, commodity analyst at Commerzbank AG, said:

The selling pressure was caused by a significantly stronger US dollar and a sharp rise in US bond yields.

However, hotter inflation could work in favour of gold prices in the medium to long term. 

In the weeks leading up to the election, the US dollar had already risen markedly in anticipation of a Trump victory. 

“However, this did not stop the gold price from rising to new record highs,” Fritsch said. 

“Apparently, market participants are acting after the election according to the principle of ‘buy the rumour, sell the fact’.”

Sticky inflation in the US

On Wednesday, the US consumer price index came in line with market expectations. The CPI index rose 2.6% in October on an annual basis and also increased 0.2% from September. 

Hotter inflation complicates the US Federal Reserve’s rate-cut cycle as it is one of the preferred gauges of the central bank to assess the economy and decide on monetary policy. 

An increase in inflation is usually good news for gold prices. “Due to the fact that inflation reduces the buying power of money and increases the demand for physical goods, many people consider gold to be a good inflation hedge,” Kitco.com said in a report. 

Moreover, President-elect Donald Trump is expected to increase tariffs on all imported goods and also employ tax cuts. This is expected to raise prices in the US and also accelerate the inflation rate. 

According to the CME FedWatch tool, traders have priced in a 62.4% probability of the US central bank trimming rates by 25 basis points in December. 

Fed Chair Powell more cautious

On Thursday, US Fed Chair Jerome Powell said at a Dallas event that with the economy still growing, the job market solid and the inflation rate above the 2% threshold, the bank has to be careful with more cuts. 

This weighed on market sentiments as the probability of Fed cutting rates by 25 bps in December slipped. 

But, experts believe that the incoming Trump administration could pursue the Fed to ease its monetary policy anyway. 

“If Trump were to additionally influence the Fed’s monetary policy and the latter were to fail to respond to higher inflation as required, the price of gold would rise significantly,” Commerzbank’s Fritsch said. 

Additionally, analysts at Kitco.com also believe that Trump could put pressure on the Fed to ease the monetary policies in order to bolster the economy. 

“Many anticipate that Trump would encourage the Federal Reserve to take a more dovish posture in order to bolster economic development, given his repeated statements expressing a desire for lower interest rates,” Kitco.com said in a report. 

Gold’s retracement an opportunity for investors

The US election results took the steam out of gold’s year-to-date rally last week. The World Gold Council (WGC) said in a note that the reaction was a “bit of a knee-jerk sting”. 

After Trump’s emphatic win, the continued strengthening of the dollar and Treasury yields, and a boost to cryptocurrencies along with risk-on sentiment in equities have weighed on the price of gold. 

“These factors might presage a welcome pause, even a healthy near-term retracement, for gold,” WGC said. 

Investors are likely to find purchasing opportunities during these uncertain times, especially if gold prices decline further. 

“The hedging function of gold is crucial due to ongoing inflationary pressures and geopolitical reasons; a change in Fed policy might revive a positive trend,” Kitco.com added. 

Trump’s policies to keep gold in demand

Experts said that Trump’s planned tax cuts are likely to lead to a significant increase in the budget deficit. 

This could cast doubt on creditworthiness of US public finances, Fritsch said. 

“This would benefit gold, which, unlike US government bonds, cannot be multiplied at will,” Fritsch added. 

“In this context, central banks in emerging economies are likely to seek to further increase the share of gold in their currency reserves, which would be accompanied by continued gold purchases.”

Commerzbank AG believes there is still the possibility of new record highs in gold prices. 

Meanwhile, WGC noted that even with current headwinds for gold, there is still fundamental support for prices. “And if it’s a retracement, we don’t expect it’ll develop into a rout,” the council said. 

According to WGC, gold’s recent downfall is a near-term phenomenon. 

It said that western investors, outside of futures, have not added much gold this year and so there is unlikely a slew of sellers in the wings. 

Moreover, equity markets were heavily concentrated and richly valued during the end of a business cycle, while geopolitical tensions remain elevated. These factors are expected to keep gold in demand in the longer term. 

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Indonesia’s middle class, once a symbol of the nation’s economic resilience, has suffered a severe contraction since 2019.

According to the Central Bureau of Statistics, nearly 10 million people have slipped out of this income group, reducing their numbers from 57.3 million in 2019 to 47.8 million in 2023.

At the same time, the aspiring middle class, a demographic one step below, grew from 128.85 million to 137.5 million.

Together, these groups represent approximately two-thirds of Indonesia’s population of 277 million.

This shift reveals deep vulnerabilities in the country’s socio-economic fabric, exacerbated by the pandemic, structural economic challenges, and a lack of comprehensive social safety nets.

How Covid-19 exposed economic vulnerabilities

The Covid-19 pandemic had devastating effects on Indonesia’s middle class.

Prolonged lockdowns, event cancellations, and restrictions disrupted livelihoods, particularly for entrepreneurs and small business owners.

The decline in disposable incomes saw many families falling below the middle-class threshold, defined as those spending between two million rupiahs ($127) and 9.9 million rupiahs ($638) monthly.

A significant issue was the limited access to government support for this group.

Social assistance mechanisms, such as cash transfers and energy subsidies, were plagued by inclusion errors, often bypassing middle-class households.

Those reliant on informal employment or small businesses faced additional hurdles, as most benefits were distributed through formal employment channels.

Structural economic weaknesses contribute to middle-class decline

Beyond the pandemic, broader economic challenges have further strained Indonesia’s middle class.

The country’s reliance on trade has left it vulnerable to global economic slowdowns.

Major trading partners like the US, China, and Japan have reported contractions, impacting demand for Indonesian exports.

Weakening commodity prices and reduced trade volumes have added pressure on incomes.

Deindustrialisation has reshaped Indonesia’s labour market.

Manufacturing, which historically absorbed a significant share of the workforce, has lost ground to the services sector.

Much of this sector remains informal, offering lower wages and minimal job security.

These changes have resulted in stagnant income growth and reduced upward mobility, making it harder for families to re-enter the middle class.

Government initiatives and promises for recovery

The inauguration of President Prabowo Subianto has raised hopes for economic recovery.

During his campaign, Prabowo pledged ambitious goals, including achieving GDP growth of 8% and eradicating poverty.

Initiatives such as a nationwide free school lunch programme aim to tackle childhood stunting and improve educational outcomes, which could have long-term benefits for economic mobility.

Critics argue that addressing structural issues, such as weak productivity and labour standards, is equally critical.

Indonesia lags behind competitors like Vietnam and Bangladesh in these areas, limiting its ability to attract higher-value industries.

Economists have emphasised the need for investment in research, development, and innovation to boost productivity and create sustainable opportunities for the middle class.

Challenges facing Indonesia’s economic recovery

While Indonesia’s economy has grown steadily at about 5% annually since the pandemic, this rate falls short of what is needed to rebuild the middle class.

Persistent inflation, rising interest rates, and a sluggish global economy have constrained domestic consumption.

Families that once belonged to the middle class now spend cautiously, focusing on essentials rather than discretionary items, slowing economic recovery.

The absence of robust social safety nets continues to be a major impediment.

Without targeted interventions, middle-class families risk falling into a cycle of poverty, further widening income disparities.

Economists recommend reforms to strengthen formal employment, improve social assistance programmes, and promote equitable access to opportunities.

A long road to rebuilding the middle class

The contraction of Indonesia’s middle class is a stark reminder of the fragility of economic progress.

The pandemic exposed gaps in the country’s social and economic systems, and addressing these requires sustained effort and policy reforms.

With targeted measures, including improved labour regulations, investments in productivity, and a focus on social mobility, there is hope for rebuilding the middle class.

However, progress will depend on the government’s ability to balance short-term relief with long-term structural changes.

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Millennials are reshaping the narrative around midlife crises as financial realities and evolving values redefine what this pivotal life stage looks like. Born between 1981 and 1996, millennials face unique challenges compared to previous generations.

A combination of stagnant wages, mounting student loan debt, rising living costs, and delayed life milestones like home ownership and family planning has left many feeling financially strained.

The concept of a midlife crisis, once associated with lavish spending on sports cars and exotic vacations, now takes on a different meaning for this generation.

A recent study by the Thriving Center of Psychology found that 81% of surveyed millennials feel they can’t afford to have a traditional midlife crisis.

The economic struggles that have defined their lives often limit their ability to indulge in costly pursuits during moments of existential questioning.

Financial constraints have not eliminated the emotional and psychological elements of a midlife crisis.

For millennials, these challenges manifest in different, often less extravagant ways, as they grapple with questions of purpose, fulfilment, and identity.

Millennials earn 20% less than baby boomers did at the same age

The economic landscape millennials have navigated is markedly different from that of their predecessors.

Millennials earn about 20% less than baby boomers did at the same stage of life, even as living costs have soared.

Rising housing prices and inflation have forced many to delay traditional milestones, such as purchasing homes or starting families.

These financial barriers have contributed to a sense of stagnation, leaving many millennials feeling unfulfilled and questioning the value of traditional career paths.

With the burden of student loan debt and a competitive job market, discretionary spending on items commonly associated with midlife crises—such as high-end cars, cosmetic surgery, or extended travel—is often out of reach.

Instead, millennials may find themselves engaging in less costly but equally impulsive behaviours, like wardrobe overhauls or spontaneous weekend trips, in an effort to reclaim a sense of control and youth.

Redefining the midlife crisis for a new generation

While older generations might view the midlife crisis as a time marked by conspicuous consumption, millennials are shifting the focus towards personal growth and emotional well-being.

For many, the essence of this life stage lies in the search for meaning and identity, rather than material symbols of success.

Instead of extravagant spending, millennials may seek fulfilment through smaller lifestyle changes or investments in their mental health.

Attending therapy, exploring new hobbies, or even making career shifts towards more meaningful work are all examples of how this generation navigates midlife challenges.

The digital age also plays a significant role in shaping the millennial experience of a midlife crisis.

Social media’s constant stream of aspirational content and “rage-baiting” headlines can exacerbate feelings of inadequacy and anxiety, leaving individuals questioning their achievements and place in the world.

The psychological toll of financial instability

The financial instability many millennials experience has profound psychological implications.

Anxiety, depression, and burnout are common among this generation, particularly as they face the weight of economic pressures alongside social expectations.

Unlike baby boomers, who often grappled with fears of ageing or personal dissatisfaction during midlife crises, millennials frequently contend with a “crisis of purpose.”

Many millennials were encouraged to strive for ambitious goals, only to find themselves wondering if those achievements brought genuine satisfaction.

For some, the reality of reaching professional milestones without the financial rewards to match has led to feelings of disillusionment.

A shift towards entrepreneurship and self-employment

Faced with traditional work structures that often fail to deliver fulfilment or financial security, many millennials are exploring entrepreneurship and self-employment as alternatives.

These paths offer the potential for greater freedom and the chance to align careers with personal values.

By pursuing non-traditional routes, millennials hope to escape the stagnation and lack of autonomy that often define midlife crises for their generation.

Millennials’ changing perspective on success and freedom

Ultimately, millennials are transforming what it means to experience a midlife crisis.

While their financial constraints may preclude them from traditional expressions of this life stage, their focus on emotional and psychological well-being reflects a broader cultural shift.

This generation is less inclined to equate material wealth with happiness and more likely to prioritise work-life balance, personal freedom, and meaningful relationships.

As millennials continue to redefine success on their own terms, the midlife crisis evolves alongside them.

This transformation challenges the traditional understanding of this life stage and underscores the unique struggles and aspirations of a generation navigating an uncertain economic and social landscape.

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Ben & Jerry’s, the iconic ice cream brand known for its social activism, filed a lawsuit on Wednesday against its parent company, Unilever, accusing the consumer goods giant of censorship and threats.

The lawsuit claims Unilever attempted to dismantle Ben & Jerry’s independent board to silence its support for Palestinian refugees amidst the ongoing war in Gaza.

This legal move underscores the growing rift between the two companies, which has deepened since Ben & Jerry’s 2021 decision to halt sales in Israeli-occupied West Bank territories, citing inconsistency with its values.

The lawsuit asserts that Unilever tried to stifle Ben & Jerry’s efforts to express solidarity with Palestinian refugees, support US student protests against civilian casualties in Gaza, and call for an end to US military aid to Israel.

“Unilever has silenced each of these efforts,” the lawsuit reads.

Unilever, for its part, stated that it would “strongly defend” itself against the accusations, dismissing the claims made by Ben & Jerry’s social mission board.

Support Israel but not all its policies: Ben and Jerry’s founders

In 2021, Ben & Jerry’s announced it would stop selling ice cream in Israeli-occupied territories, igniting significant backlash.

The move led to financial repercussions for Unilever, including the divestment of shares by US pension funds and shareholder lawsuits.

The company, co-founded by Bennett Cohen and Jerry Greenfield, has voiced its views on topics such as environmental sustainability, economic inequality, and peace initiatives.

The founders, both “proud” Jews, stated in a 2021 New York Times article that their support for Israel does not preclude opposition to certain policies, paralleling their criticism of US policies.

A history of activism and conflict

Ben & Jerry’s has a longstanding reputation for taking bold stances on political and social issues, dating back to the 1980s.

The company’s first significant foray into political issues began with advocating for reduced US military spending and opposing the 1991 Persian Gulf War.

Over the decades, the brand has taken positions on numerous issues, including climate change, marriage equality, racial justice, and criminal justice reform.

In 2013, Ben & Jerry’s publicly backed same-sex marriage, launching a special flavor, “Apple Pie,” to signal its support.

Similarly, following George Floyd’s murder in 2020 and the subsequent Black Lives Matter protests, Ben & Jerry’s released a powerful statement titled We Must Dismantle White Supremacy.

This statement urged the US Congress to pass HR 40, aimed at studying the effects of slavery and discrimination.

More recently, shortly after the results of the US presidential election were announced, the ice cream maker released a detailed statement titled ‘The 2024 Election Is Over, But The Work Isn’t,’ reiterating its support for causes such as access to abortion, stronger gun laws, and ending arms sales to Israel, among others.”

“Ben & Jerry’s will continue to unapologetically support the advocates who champion the above agenda regardless of who sits in the Oval Office,” it said.

(Unit sales of the leading ice cream brands in the United States in 2023, Source: Statista)

Using ice cream flavor as a means to take a stand

Ben & Jerry’s has consistently used creative ways to amplify its messages, including special edition flavors with political undertones.

In 1988, the company launched Rainforest Crunch to support Amazonian nut cooperatives.

The Peace Pop, also introduced in 1988, promoted 1% for Peace, a nonprofit founded by Ben & Jerry’s owners promoting international peace efforts.

Other notable flavors include Yes Pecan!, a nod to Barack Obama’s campaign, and Pecan Resist, which protested President Trump’s policies around racial and gender equity, climate change, LGBTQ rights, and refugee and immigrant rights.

The “Change Is Brewing” flavor, launched in partnership with Black-owned businesses, supported US Representative Cori Bush’s police reform bill.

The company’s liberal stance on the Iraq War in the early 2000s led to a counter-response from some conservatives, who formed Star Spangled Ice Cream- and marketed the company as a conservative alternative to Ben & Jerry’s.

This new entrant featured flavors like “Smaller Governmint” and “Navy Battle Chip,” playing on conservative ideas.

A culture of corporate activism

The company’s commitment to social justice extends to its leadership structure.

Ben & Jerry’s head of global activism strategy, Christopher Miller, described in a 2021 Harvard Business Review interview how the activism team collaborates closely with marketing to ensure that advocacy aligns with the brand’s voice.

The company’s activism efforts are managed by a dedicated team that increases its activity during significant social or political moments.

Ben & Jerry’s approach contrasts with the often cautious corporate responses seen from many other brands.

While most companies aim to avoid controversy, Ben & Jerry’s has cultivated credibility in activism through its unwavering commitment over the years.

“We believe business is among the most powerful entities in society. We believe that companies have a responsibility to use their power and influence to advance the wider common good. Over the years, we’ve also come to believe that there is a spiritual aspect to business, just as there is to the lives of individuals. As you give, you receive,” the founders said in the NYT article.

Bouquets and brickbats

Ben & Jerry’s activism has not been without consequences.

The company’s 2021 move related to halting sales in West Bank led to financial repercussions for Unilever, including the divestment of shares by US pension funds and shareholder lawsuits.

In 30 US states, regulations prohibit pension funds from investing in companies that refuse to conduct business with Israel.

Texas’s comptroller of public accounts, responsible for managing billions in public pension fund assets, took steps to blacklist Ben & Jerry’s if it was found to violate these laws.

Besides, the president of Israel called the move “a new kind of terrorism” that would have “serious consequences” for the company. 

Also, while many consumers appreciate the company’s commitment to progressive values, others view its actions as overly political or divisive.

It has also led to calls for boycotts and sparked debates about the role of corporations in social and political issues.

For some critics, Ben & Jerry’s involvement in international politics undermines the neutrality of business, while others argue that companies should use their platform to advocate for social change.

“In many cases, skepticism about corporate activism, of its performative nature and limited impact, is justified. But sometimes that kind of activism is all we have,” said Nesrine Malik, a Guardian columnist in a 2021 column.

“Ben & Jerry’s almost certainly conducted a rational cost-benefit analysis and found that such a move may harm the company, but not annihilate it,” she said.

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The Venezuelan bolívar has lost 24% of its value against the US dollar over the past year, exacerbating the country’s ongoing economic struggles.

In the last eight weeks alone, the official exchange rate set by the Central Bank of Venezuela has dropped from 36.7 to 45 bolívares per dollar.

This sharp decline is largely driven by growing distrust in the bolívar’s stability, compounded by the country’s deepening political and economic uncertainties following the July 28th election.

Venezuela’s currency depreciation

The looming uncertainty surrounding Venezuela’s next election has contributed to a volatile currency market, unseen in almost ten months.

As confidence in the bolívar wanes, businesses that once resumed trading in the national currency are now shifting back to foreign currencies.

Over 60% of transactions are still made in bolívares, but this marks a significant drop from the 76% two years ago, according to economist Aldo Contreras.

The bolívar’s rapid depreciation is also hurting businesses reliant on imports and dollar-based costs, leading to financial losses.

In an attempt to stem the tide, the Central Bank has injected $60 to $70 million into the foreign exchange market, but experts argue this is only a short-term fix, addressing symptoms rather than the underlying causes of the bolívar’s decline.

The Euro gaining ground in Venezuela

As Venezuela struggles with its currency crisis, the euro is becoming an increasingly popular alternative to both the bolívar and the dollar.

With unpredictable exchange rates and government restrictions on the parallel dollar market, businesses are opting to charge in euros to avoid the disparity between official and black market dollar rates.

As of November 15, the official exchange rate for the dollar was VES 45.5, while the parallel rate stood at VES 53.5, a 17.5% difference.

The euro’s growing role is a clear indicator of widespread distrust in both the bolívar and the dollar.

The exchange rate for the euro has surged 20.75% from December 2023 to November 2024 and by 24% against the dollar.

As a result, consumers paying in bolívares may face a 16% price increase as businesses adjust their prices to account for the currency volatility.

Reason behind bolívar’s depreciation

The bolívar’s collapse is rooted in multiple economic challenges, including political instability, an expanding money supply, and a lack of credible credit systems.

The Central Bank’s failure to implement transparent and effective economic policies further undermines investor confidence and hinders any potential recovery.

Contreras emphasizes that a coherent, transparent approach to monetary policy, along with strategic foreign investments, is critical to restoring confidence in the bolívar.

Without these measures, Venezuela’s economy remains vulnerable to further instability.

The devaluation of the bolívar is not just impacting businesses and investors—it’s also significantly affecting consumer behavior. Economists predict a 20% to 30% drop in sales during the upcoming holiday season as Venezuelans tighten their belts amid rising prices and dwindling resources.

Many are already demanding foreign currency for transactions or converting their savings into dollars, further distorting the local market.

The economic challenges facing Venezuela are vast, and the decline of the bolívar is a direct result of political and economic instability. To reverse the downward spiral, Venezuela needs comprehensive reforms that restore trust in its currency, stabilize the economy, and attract foreign investment.

Without such reforms, the country’s path to recovery remains uncertain, and the outlook for economic stability appears bleak.

As Venezuela navigates post-election changes, both domestic and international stakeholders will be watching closely to see how policymakers address these critical issues.

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