BOK "Gold Prices to Remain Strong for a While... Impact of Accommodative Monetary Policy"

Gold Prices Up 33% Since Year-End Due to Weakness in US Dollar and Other Factors

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] The Bank of Korea forecasted that international gold prices, which have currently surpassed $2,000 per ounce, will continue to remain strong for some time.

In its Overseas Economic Focus report on the 9th, the Bank of Korea stated, "As accommodative monetary policies continue in major countries, liquidity is expected to remain abundant for the time being."

The Bank of Korea added, "However, some investment banks (IBs) have also presented views that gold prices may slightly decline after the third quarter, considering the low possibility of further declines in real interest rates at this stage."

According to the Bank of Korea, as of the 4th, gold prices rose 33% compared to the end of last year, reaching an all-time high due to the decline in real interest rates and the weakening of the US dollar.

The yield on the US 10-year Treasury Inflation-Protected Securities (TIPS) (real interest rate) turned negative since March this year and fell to -1.0% as of the 31st of last month, the lowest point since December 2012.

The dollar index, which reflects the value of the dollar against six major currencies, dropped significantly after the end of June (97.4) and fell to 93.5 as of the 3rd of this month.

According to the Bank of Korea, Goldman Sachs projected gold prices to reach $1,950 per ounce in the third quarter and $2,100 in the fourth quarter.

Citibank forecasted $1,825 in the third quarter and $1,850 in the fourth quarter, while JP Morgan projected $1,933 and $1,880 for the same periods, respectively.

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