Gold prices are rallying in Korea to join global gold-buying spree amid growing economic uncertainties from intensifying trade war between the United States and China and absence of investment targets.
According to the Korea Exchange on Wednesday, the price of gold in Korea closed Tuesday at 51,450 won ($43.70) per gram, the highest since KRX Gold Market opened in March 2014. The price has been setting a new record high over the last three trading sessions in a row.
The gold prices in Korea have been moving in sync with the recent rise in gold prices globally. Gold prices at Comex, primary futures and options market for trading metals such as gold in New York, rose to yearly high of $1,353.8 per ounce (about $47.75 per gram) last week.
Recent upward swing in global gold prices is mainly due to the trade protectionism policy of the U.S. The Donald Trump administration has been rooting for monetary easing and weakening of the dollar amid signs of softening in the economy. If the U.S. Federal Reserve cuts benchmark rate as hoped by the Trump administration, the value of dollar will fall. Gold prices and dollar’s value moves in opposite direction.
The movements in the U.S. drove the global gold demand further up, which already has been expanding rapidly on escalating uncertainties over global economic outlook from the intensifying U.S.-China trade war.
Assets in SPDR Gold Shares, one of world’s largest exchange-trade funds, jumped 16.44 metric tons, or 2.2 percent on June 3 alone, to post the biggest gain since July 2016. Global ETFs’ gold reserves stood at 7,250 tons, the largest since February, as of June 14. According to Seoul-based market tracker FnGuide, the yields of the country’s 12 gold-related funds averaged 7.41 percent for one-month product, 4.15 percent for three-month, and 11.25 percent for six-month.
By Jung Hee-young and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]