Gold Prices Rebound as Individual Investors Turn to Buying
Gold prices have rebounded in recent months due to easing concerns over interest rate hikes after the release of July US employment data and consumer price index. Individual investors, who had been net selling gold for three consecutive months since May, turned to buying this month, purchasing a total of 133 billion won worth of gold in the KRX gold market until the 14th of this month.
The trend change is attributed to the rebound in the international gold market, which had been on the decline due to concerns about tightening US Federal Reserve and sharp rise in oil prices following the US-Iran war. However, with interest rate hike concerns easing, funds tend to flow back into gold, an asset that does not incur interest or dividends.
As of the 13th of this month, the international gold futures price was $4420.40 per ounce, up 9% from the end of last month ($4049.10). The gold price (99.99_1kg) of the KRX gold market also rose to 205,770 won per gram on the 13th of this month, up 13,110 won from the end of last month.
Experts' outlook on whether gold prices will continue to rise is mixed. Oh Jae-young, a researcher at KB Securities, said that uncertainty about the US-Iran war and Fed's tightening concerns still exist, making it difficult to expect a trend increase in gold prices. However, if concerns about interest rate hikes are eased in the future, some predict that gold prices will rise.
Choi Ye-chan, a researcher at Sangsang Certification Authority, predicted that gold prices could rise to around $5,000 an ounce by the end of the year, considering that it recovered about 90% from its peak after an average of eight months of decline since its historical gold peak in the past.