When gold prices rise sharply, many people assume that the cost of basic necessities must rise at the same pace. This assumption often leads to unnecessary fear about future living costs. In reality, the relationship between gold prices and food prices is more complex and depends heavily on economic stability and supply conditions.
Gold as a Store of Value
Gold functions primarily as a store of value rather than a consumer good. Its price reflects inflation expectations, currency depreciation, global monetary policy, and investment demand. Because of this, gold prices can increase significantly even when everyday goods remain relatively affordable.
Rice Prices and Economic Fundamentals
Rice prices are driven by production, supply chains, labor costs, transportation, and government policy. As a staple food, rice is closely monitored and regulated in many countries to ensure affordability and availability. In a stable economy, rice prices tend to follow general inflation rather than speculative market movements.
A Scenario Without a Food Crisis
If gold reaches IDR 10 million per gram in an environment where food production and distribution remain stable, rice prices are unlikely to experience extreme increases. Without supply shortages or major disruptions, price movements in staple foods remain gradual and predictable.
Inflation and Long-Term Price Adjustment
Over long periods, moderate inflation naturally raises the price of goods and services. In such conditions, rice prices may increase steadily but remain within a manageable range. This gradual adjustment reflects rising costs of production rather than sudden market shocks.
Purchasing Power of Gold Over Time
One of gold’s most important characteristics is its ability to preserve purchasing power. When measured against essential goods like rice, gold often maintains or improves its relative value over long periods. This means that even as nominal prices rise, gold holders may retain strong buying power.
Why Rising Gold Prices Do Not Signal Economic Collapse
A rising gold price does not automatically indicate an economic crisis. Gold can appreciate due to currency weakening, global uncertainty, or increased investment demand without implying shortages of food or basic goods. In such cases, daily life can remain stable despite higher asset prices.
Conclusion
If gold reaches IDR 10 million per gram in a stable economic environment, rice prices are likely to rise moderately rather than dramatically. The key distinction lies between asset inflation and consumer price inflation. Gold reflects long-term monetary trends, while rice prices reflect real-world supply and demand fundamentals.
