Rising Gold and Silver Prices Boost Raw Material Funds and ETFs' Success

Natural Resource Fund Up 55.59% in 3 Months · KODEX Silver Futures (H) Up 51.8% in 1 Month
Favorable Investment Environment Expected to Continue for Precious Metals Like Gold and Silver

[Asia Economy Reporter Song Hwajeong] Recently, as gold prices have been hitting record highs day after day and raw material prices continue to soar, related funds and exchange-traded funds (ETFs) are also recording high returns. It is expected that the bullish trend will continue as a favorable environment for precious metals such as gold and silver persists for the time being.

According to financial information provider FnGuide on the 7th, gold funds, commodity funds, and natural resource funds are showing high returns. The recent 3-month return of 28 natural resource funds with assets under management exceeding 1 billion KRW reached 55.59%, the highest among all 43 themes. In addition, gold funds and commodity funds recorded high returns of 20.31% and 49.16%, respectively.

Looking at returns by fund, Samsung KODEX Silver Futures Special Asset ETF (Silver-Derivative Type) (H) posted a remarkable 3-month return of 71.84%, Korea Investment KINDEX Gold Futures Leverage Special Asset ETF (Gold-Derivative Type) (Synthetic H) recorded 32.38%, Mirae Asset TIGER Gold and Silver Futures Special Asset ETF [Metal-Derivative Type] 19.85%, and Samsung KODEX Copper Futures Special Asset ETF [Copper-Derivative Type] (H) 23.88%.

ETFs also achieved outstanding returns in related sectors. According to the Korea Exchange, KODEX Silver Futures (H) posted a one-month return of 51.8%, the highest among all ETFs. KINDEX Gold Futures Leverage (Synthetic H) rose 29.74%, and TIGER Gold and Silver Futures (H) increased by 16.91%.

The reason these related funds and ETFs have shown high returns is due to the strong performance of precious metal prices, including gold. On the 6th (local time) at the New York Mercantile Exchange, December gold futures closed at $2,069.4 per ounce, up $20.10 (1.0%) from the previous trading day. Gold has risen for five consecutive trading days, continuing its record-high streak. Silver prices are also showing a steep upward trend. On the same day at the New York Mercantile Exchange, silver prices rose $1.51 (5.62%) to $28.38 per ounce, increasing by more than 50% in the past month.

Hwang Byungjin, a researcher at NH Investment & Securities, analyzed, "The metal investment theme is shifting from a preference for safe assets to inflation hedging," adding, "Recently, attempts at price strength in gold, silver, and copper have been prominent in the commodity market." Copper prices, which lead and coincide with the global economic cycle, tend to be strong from the early to late expansion phases. Gold prices rise in the late expansion phase based on safe-haven demand amid economic caution, reflect economic recessions, and incorporate inflation hedge demand at the early expansion phase. Silver, which possesses characteristics of both gold (precious metal) and copper (industrial metal), is analyzed to perform best during the inflation hedge phase preparing for the early expansion phase of the economy.

As the favorable environment for precious metals continues, prices are expected to keep rising. As long as the global monetary easing stance led by the U.S. Federal Reserve (Fed) is maintained, the bullish outlook for precious metals such as gold and silver remains valid, and the need to hold safe assets within portfolios amid stock market volatility also remains relevant. Researcher Hwang said, "The investment environment favorable to gold and silver prices will continue," and added, "We expect gold prices to rise to $2,200 per troy ounce and silver to the mid-$30 range over the next 12 months."

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