"You Said It Would Go Up"... Bought Gold as War Broke Out, Now Prices Plunge and Investors Frown

The domestic gold price, which once surged due to the war between the United States, Israel, and Iran, has now returned to pre-war levels.

According to the Korea Exchange on March 17, the domestic gold price on the KRX Gold Market closed at 239,550 won per gram, down 0.35% from the previous session. The gold market opened at 240,350 won per gram that day, dropped at one point to 238,570 won per gram, and then showed some recovery.

The domestic gold price, which once surged due to the war between the United States, Israel, and Iran, has returned to the pre-war level. Getty Images

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Domestic gold prices had soared at one point as the war began following a preemptive strike by the United States and Israel against Iran.

On February 27, before the Middle East crisis, the price per gram was around 239,570 won, but on March 3, the first day the war was factored in, it temporarily jumped to 252,530 won per gram during trading hours.

Afterwards, the domestic gold price continued to stay in the low-to-mid 240,000 won range per gram, but has been on a downward trend for three consecutive trading days since March 13.

An employee holding a gold bar at the Korea Gold Exchange Jongno Main Branch in Jongno-gu, Seoul. Photo by Jinhyung Kang aymsdream@

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The international gold price has seen an even steeper decline.

According to data compiled by the Korea Exchange, the international gold price per ounce stood at 5,193.39 dollars on February 27, surged to 5,380.11 dollars at one point on March 3, but has since fallen to 5,011.95 dollars per ounce, which is actually about 3.49% lower than before the war.

The domestic gold price appears to have experienced relatively smaller volatility compared to international prices due to the rise in the won-dollar exchange rate.

It is analyzed that the surge in international oil prices has triggered global inflation, which in turn has led major central banks such as the U.S. Federal Reserve to take a cautious stance on interest rate cuts, influencing gold prices.

Meanwhile, as Iran has reportedly not blocked the passage of ships from countries such as China, India, T?rkiye, Pakistan, and Greece through the Strait of Hormuz, there is growing optimism in financial markets that the worst-case scenario can be avoided.

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