Seoul – The price of gold has been on a relentless climb, fueling a surge in investment demand. This has led to record-breaking trading volumes in gold-related financial products and even a temporary halt in gold bar sales by the Korea Minting and Security Printing Corporation.
On Tuesday, the ACE KRX Gold Spot ETF became the most popular ETF among individual investors, with net purchases reaching a staggering 12 billion won ($9.8 million USD). This marks the highest daily net purchase by individuals since the ETF's inception.
The gold rush is being driven by a confluence of factors, including rising global uncertainty due to the ongoing trade war between the US and China. Investors are increasingly seeking safe-haven assets like gold to protect their wealth.
The soaring demand has created a shortage of physical gold, prompting the Korea Minting and Security Printing Corporation to temporarily suspend sales of gold bars. KB Kookmin Bank has also halted gold bar sales.
The price of gold has responded in kind, reaching $2932.60 per troy ounce on the New York Mercantile Exchange (COMEX) on Tuesday. This represents a 44% increase over the past year, making gold the best-performing asset among 12 major global assets tracked by BlackRock.
The strong performance of gold has also boosted gold-related ETFs. The ACE KRX Gold Spot ETF has seen a 24.51% increase since the beginning of the year, while the ACE Gold Futures Leverage (Synthetic H) ETF has risen by 19.69%.
Market analysts expect the demand for gold to remain strong in the near future. The US Federal Reserve is expected to maintain its accommodative monetary policy, and the escalating trade war is likely to further highlight the importance of gold as a safe-haven asset.
Hwang Byeong-jin, head of FICC Research Department at NH Investment & Securities, predicts that gold prices could reach $3,000 per ounce in the first half of the year, provided that the US Federal Reserve does not change its current monetary policy stance. He also anticipates that the gold price rally will continue into the long term, with prices exceeding $3,000 by the end of the year.
[Copyright (c) Global Economic Times. All Rights Reserved.]
