Bankrupt Stock Market and Coins vs. "Gold Again This Year"... Trading Volume Explodes in 3 Years, Daily Trading Value Hits 7.6 Billion

Gold bar
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[Asia Economy Reporter Lee Seon-ae] The volume of gold trading is expected to increase explosively this year. Due to the increased volatility in the stock market and cryptocurrencies causing massive investment losses, demand is pouring into gold, which is considered a relatively stable asset.

According to the Korea Exchange on the 4th, the total trading volume of the KRX Gold Market increased from 10,713.3 kg in 2019 to 26,201.0 kg in 2020, and 28,295.8 kg in 2021. The average daily trading volume was only 43.6 kg in 2019 but jumped to 105.6 kg in 2020, and further increased to 114.1 kg in 2021.

The monthly gold trading volume in the KRX Gold Market did not exceed 1,000 kg until 2018. Since the KRX Gold Market was established in 2014, the average monthly trading volume remained below 500 kg. However, in 2020, the monthly trading volume surpassed 4,000 kg, marking a remarkable achievement.

The trading value also showed explosive growth. The trading value was 591.96 billion KRW in 2019, 1.80138 trillion KRW in 2020, and 1.88174 trillion KRW in 2021. The average daily trading value increased from 2.41 billion KRW to 7.26 billion KRW, and then to 7.59 billion KRW in 2021.

This year, the trading volume of the KRX Gold Market is expected to continue its upward trend. As the global stock market environment deteriorates, funds are pouring into global gold exchange-traded funds (ETFs), causing explosive demand for gold. According to ETF.com in the U.S., the ‘SPDR Gold Trust (GLD)’, an ETF investing in physical gold, saw a net inflow of $2.18226 billion (approximately 2.6274 trillion KRW) from January 19 to 25. This is the second-largest inflow among all ETFs based on the ratio of inflow to assets under management (AUM). On the 21st of last month, $1.6 billion (approximately 1.9264 trillion KRW) was inflowed, marking the largest daily inflow ever recorded.

The rise of gold is closely related to the precarious global stock market situation. Amid growing inflation concerns and fears of war between Russia and Ukraine, gold’s popularity has surged. The sharp decline of Bitcoin, which rose rapidly last year as ‘digital gold,’ has also strengthened gold’s position.

Goldman Sachs forecasted that concerns over inflation this year will increase demand for safe assets, and gold prices could rebound significantly. The 12-month gold price forecast was raised from $2,000 to $2,150. Goldman Sachs stated, "The combination of low growth and high inflation will create demand for gold," adding, "Gold will be a good hedge against bad inflation."

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