Record High Gold Prices... Is It a Good Time to Buy Now?

▲Gold Price Hits Highest Level in 2 Years and 3 Months

[Asia Economy Reporter Koh Hyung-kwang] The price of gold (金), considered a representative safe-haven asset, is soaring to unprecedented highs day after day. As signs of a resurgence of COVID-19 and growing uncertainties surrounding the stock market increase, this upward trend is expected to continue for the time being.

According to the Korea Exchange on the 18th, the price of gold spot per gram on the KRX gold market closed at 70,020 KRW, down 0.4% from the previous trading day. On the 16th, the gold price recorded 70,300 KRW, the highest closing price since the KRX gold market was established in March 2014. Although the price fell slightly compared to the 16th, it is 23.1% higher than the price at the beginning of this year (56,860 KRW). The gold price, which hit a two-month high at 69,900 KRW on the 13th, continued its upward trajectory by closing at 70,000 KRW on the 14th.

Experts diagnose that as the global stock markets have shown a rapid recovery, but uncertainties such as the resurgence of COVID-19 remain, gold buying as a risk hedge is increasing. Since gold is considered a representative safe-haven asset, its price rises as concerns about the stock market grow.

There is also analysis that the abundant liquidity in the market, due to the accommodative fiscal and monetary policies of major governments and central banks worldwide, is driving this trend. The ultra-low interest rate environment, which is causing the value of currency to decline, is also cited as a factor attracting demand for gold.

Experts expect the strong gold price trend to continue for the time being. Kim So-hyun, a researcher at Daishin Securities, forecasted, "As long as the low interest rate environment continues, the upward trend in gold prices is likely to persist." Jeon Gyu-yeon, a researcher at Hana Financial Investment, also said, "With increased investment in risk assets due to large-scale liquidity supply by global central banks, investors are increasing their investment in gold, a safe-haven asset, to balance their portfolios amid uncertainties. Given many variables such as the U.S. presidential election and U.S.-China conflicts in the second half of the year, preference for safe-haven assets will continue."

This content was produced with the assistance of AI translation services.